Trump targets Brazil with massive tariff threat over Bolsonaro, tech

President Trump on Wednesday launched a multi-front trade assault on Brazil, threatening it with massive new tariffs and demanding the end of criminal charges against his ally former President Jair Bolsonaro.Why it matters: Trump's tariff letter to Brazil is far more aggressive, with a much higher levy, than any other trade missive he's sent this week — and it prompted Brazilian President Luiz Inácio Lula da Silva to push back on what he called "interference" in the nation's affairs.The letter threatens $42 billion in annual U.S. imports, everything from steel to coffee, and the potential collapse of a trading relationship with one of the few countries where the U.S. runs a trade surplus. Driving the news: Trump opened his letter that is among 22 he has sent out to countries this week with an explicit demand to end the trial of Bolsonaro over charges for allegedly plotting a coup."This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!" Trump wrote in the letter, a copy of which was posted to Truth Social. The letter goes on to insist Brazil has treated U.S. social media companies unfairly, accusing the government of censoring free speech and threatening a 50% levy on Brazilian imports. Zoom in: Trump also said he was ordering a so-called Section 301 probe of Brazil, which would allow the U.S. to take even broader trade measures against the country.He cited Brazil's "continued attacks on the Digital Trade activities of American Companies," an apparent reference to the country's proposed digital services tax — a hot-button trade issue for the administration. The intrigue: Trump's letter notes that the 50% blanket tariff would stack on top of other sectoral tariffs — potentially making Brazilian steel, for example, prohibitively expensive. But the letter makes no mention of the additional "BRICS" levy Trump recently threatened.At 50%, Brazil would face a higher tariff than any other country in the world, based on the rates the administration has confirmed so far. Worth noting: Brazil implemented a law earlier this year that gives the government broad authority to respond to trade measures by other countries.Lula said in response to Trump's letter that "any measure to increase tariffs unilaterally will be responded to in light of Brazil's Law of Economic Reciprocity."What they're saying: "Brazil is a sovereign country with independent institutions that will not accept being tutored by anyone," Lula said in posts to his social media accounts. "The judicial process against those who planned the coup d'état is the sole responsibility of the Brazilian Judiciary and, therefore, is not subject to any kind of interference or threat that undermines the independence of national institutions," he said."In the context of digital platforms, Brazilian society rejects content that conveys hate, racism, pornography, coups, fraud, and speech against human rights and democratic freedom."Freedom of expression in Brazil "is not to be confused with aggression or violent practices," Lula wrote."To operate in our country, all national and foreign companies are subject to Brazilian legislation. It is false information, in the case of the commercial relationship between Brazil and the United States, regarding the alleged American deficit," he added."Statistics from the United States government itself confirm a surplus of that country in the trade of goods and services with Brazil in the amount of 410 billion dollars over the last 15 years. In this sense, any measure to increase tariffs unilaterally will be responded to in light of Brazil's Law of Economic Reciprocity." President LulaThe bottom line: Trump is trying to use the economic power of the U.S. to influence another country's domestic policy for the benefit of a personal ally.Go deeper: Trump announces 50% tariff on copper from Aug. 1Editor's note: This story has been updated with additional background and comment from Brazilian President Luiz Inácio Lula da Silva.

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