Brazilian President Luiz Inácio Lula da Silva has promised to reciprocate if United States President Donald Trump follows through with his threat to impose 50% tariffs on goods from Brazil. 

Analysts say it may be difficult to de-escalate the situation, which could rock the Brazilian economy — and start a fight with nationalist overtones that could favor Lula politically.

On Wednesday, Trump wrote a letter to Lula threatening a 50% tariff on Brazilian goods, effective from August 1. In the missive, he said he was implementing the levies in part because of the Brazilian judiciary’s prosecution of former President Jair Bolsonaro and its legal action against social media platforms. 

While the U.S. leader has sent a plethora of letters to several countries threatening tariffs recently, he has not typically linked them with a nation’s judicial affairs.

“I knew and dealt with former President Jair Bolsonaro, and respected him greatly, as did most other Leaders of Countries,” Trump’s letter began. 

“The way that Brazil has treated former President Bolsonaro, a Highly Respected Leader throughout the World during his Term, including by the United States, is an international disgrace. This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!”

Bolsonaro is currently standing trial for allegedly trying to orchestrate a coup against Lula, who narrowly defeated him in the country’s 2022 elections. In January 2023, Bolsonaro supporters stormed the country’s Congress, presidential palace and Supreme Court shortly after Lula took office.

Some individuals who fled to Argentina after participating in the riots are due an extradition hearing, although the date has been moved repeatedly.

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Lula responded by posting on social media that “Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage.” He went on to point out that the trial against Bolsonaro and the litigation with social media companies are both the purview of Brazil’s judiciary, and thus not subject to “any interference or threats that could compromise the independence of national institutions.”

In his letter, Trump also incorrectly claimed that the United States had a trade deficit with Brazil. Lula highlighted that the U.S. actually has a trade surplus with Brazil — that is, it sells more goods to Brazil than it buys.

“Therefore, any unilateral tariff increases will be addressed in accordance with Brazil’s Economic Reciprocity Law,” Lula wrote.

In September, Brazil’s Supreme Court also upheld a ban on the social media platform X after it failed to name a legal representative in the country — a dispute that came amid allegations that it had failed to tackle hate speech and fake news, including relating to the elections. The ban was lifted six weeks later.

A huge opportunity for Lula

Trump’s meddling in Brazil’s affairs to advocate for Bolsonaro in a way that could be “very damaging” for the country’s economy is a “huge political opportunity” for Lula to paint Bolsonaro as anti-patriotic, according to Oliver Stuenkel, senior fellow at the Carnegie Endowment in Washington DC. 

“It’s not easy to find an off ramp,” he added. “This is not like U.S. tariffs against China, where China can promise to buy more American goods to balance the trade relationship to some extent. The U.S. has a pretty significant trade surplus with Brazil, so there’s not much Brazil can do.”

The dispute will also boost Brazilian nationalism and anti-U.S. sentiment, he added. “There’s high potential that this will shape the presidential campaign, which is ramping up right now.”

Brazil’s next presidential election will be held in October, 2026.

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Analyst Brian Winter made similar points in a post on X. “Trump’s previous battles with Petro, Sheinbaum and Mulino de-escalated relatively quickly, but those are countries with very US-connected economies & security relationships — and therefore incentives to seek quick accommodations. Not nearly as true for Brazil,” he wrote. 

“Much of Brazil’s establishment sees the Bolsonaro trial as an existential battle for democracy and there is no path to dropping the case as Trump is demanding. Lula’s approval has been trending down and he may welcome a fight with nationalist overtones.”