Just last week, former President Donald Trump went on a trade offensive against Brazil that was anything but subtle. He blames the international community of censoring U.S. speech and prosecuting its former president, Jair Bolsonaro. In a bold move, Trump announced a staggering 50% tariff on Brazilian imports, escalating the already tense trade relations between the two countries. This most recent move fits into Trump’s larger goal of using trade policy to further geopolitical aims.
It’s particularly poor timing considering this is one of the few times the United States has a positive trade balance—a trade surplus—with Brazil. The ramifications of this tariff will surely be felt across many industries, but it’s clear that our metals industry stands to be most dramatically affected. The U.S. is now feeling the lash from its reliance on Brazilian copper and steel. Trump’s threats could do a lot of damage by upending these long-settled trade patterns.
The Geopolitical Landscape
In his most recent spiel, Trump announced, “Today we’re doing copper! He touted the importance of this resource for U.S. infrastructure development. As the ninth largest copper producer, Brazil plays a critical role in supplying up to half a million tones of copper. This new copper is either already docked or steaming towards the U.S. This figure more than fully fills one-third of the U.S. copper demand per year. Its demand as well, featuring the American supply chain’s crucial dependence on Brazil’s production.
Furthermore, the impacts of Trump’s rhetoric go further than just tariffs against Brazil. He has periodically threatened a new 10% tariff on countries that he believes are aligned with BRICS. This new coalition is frequently charged with advancing “anti-Americanism.” Trump wants to redraw the world’s security alliances and trade relations to better suit his country and his vision. He’s willing to use tariffs to apply pressure and push his point.
The geopolitical ramifications of these actions are, to put it lightly, very bad. The sputtering BRICS summit, attended by all of five heads of state in person, underscores the diminishing clout of this loose coalition. Most conspicuous by his absence was Chinese President Xi Jinping—suggesting significant divisions within BRICS and the future relevance of the grouping were on display. In all this, India appears to be actively reassessing its place within BRICS. It hopes to avoid being underneath China’s growing hegemony, which would at worst give the appearance of real multilateralism.
Economic Implications for Brazil and the U.S.
Brazil’s economic landscape is under threat as Trump’s tariffs could impose additional costs on semi-finished metals that are often derived from U.S. coal and refined for re-import to the U.S. This web of interconnectedness carries significant risks for both countries. As Brazil turns into the next flashpoint in Trump’s tariff theater, U.S. industries that depend on Brazilian imports will need to quickly adjust their plans to these unforeseen developments.
Markets have been sluggish to react. This is in large part because of U.S. stockpiling efforts—which have cushioned any immediate price shocks. The long-term consequences could be far-reaching. Industry experts warn that escalating tariffs will not only lead to increased prices for consumers but may disrupt production schedules and supply chains critical to U.S. infrastructure projects.
While Trump fucks around and finds out, using trade tensions to boost his election chances, Brazil’s position is much less secure. The country, which once operated as a quiet node in global trade networks, must navigate these new challenges while balancing its economic relationships with both the United States and other BRICS nations.
Navigating Uncertainty
For Brazil, the stakes are even higher as it seeks to hold on to its newfound economic stability in a world of increasingly less favorable geopolitical conditions. The country’s leadership faces pressure to respond effectively to Trump’s aggressive posturing while safeguarding its trade interests. Trump, beneficially, is broadening his focus to include US trade policy. For Brazilian officials, this will require careful strategy in terms of how and when they engage American counterparts but other countries within the BRICS.
Adding to these issues for Brazil are the shifting allegiances within BRICS itself. With India recently re-assessing its commitment to the group, China’s increasing dominance has alarmed many. If not, Brazil runs the very real risk of losing its leadership voice in this increasingly splintering coalition. As Trump’s tariffs continue to shape the trade landscape, Brazil’s status as the “cool guy” of international trade is increasingly tenuous.