Trump’s Brazil gamble: Economic Coercion, Bolsonaro’s Trial and the Future of BRICS
US president Donald Trump. Image credit: Joyce N. Boghosian via The White House
Brazil is the latest Latin American country to fall under Donald Trump's tariff crosshairs. Beginning August 1, the United States president has promised to impose a sweeping 50 per cent tariff on all Brazilian exports. The timing behind the move is uncertain and it may be linked to the recent BRICS summit in Rio de Janeiro on July 7. Another explanation holds that Trump timed the move to influence the high-profile 2023 coup trial of former President Jair Bolsonaro, which began in May this year. The tariffs may simply serve as a protectionist maneuver to shield vital US industries, particularly steel, and prevent the US market from being flooded with cheaper imports. Regardless of Washington’s political rationale, the target is clearly disrupting Brazilian President Luiz Inácio Lula da Silva. The convergence of these interests underscores the complex calculation behind the tariff announcement and requires considering economic, geopolitical, and domestic pressures to understand Washington’s decision.
Brazilian President Lula da Silva. Photo credit: Palácio de Palnalto via Flickr
The tariffs could be an effort to rally domestic support for Bolsonaro as he stands trial for his alleged role in the 2022 attempted coup. Trump’s interests likely align with Bolsonaro’s acquittal and legal vindication to allow him to challenge Lula in next year's presidential election. It is unlikely the trial will go in Bolsonaro’s favour, as he has already admitted to meeting with military leaders to explore legal ways to remain in power despite his electoral defeat. Despite the Supreme Electoral Court banning him until 2030, Bolsonaro insists he will run in 2026, hoping to recapture the nationalist fervor that propelled his 2019 presidential victory. The strategy of eroding Lula’s popularity and using economic pressure to shift the political landscape rightward could backfire. Bolsonaro reportedly preferred targeted sanctions against the judge overseeing his trial, not a blanket tariff on all exports. Conservative Brazilian media figures have denounced Trump and accused him of damaging the economy. Bolsonaro responded, ‘It does not make me happy to see our rural and urban producers, as well as the people, suffer’. So far, Trump’s tariff threats appear to be backfiring and producing a rallying effect around Lula. As economic consequences mount, Bolsonaro risks being perceived as a willing participant in inflicting economic pain on his own supporter base, undermining his carefully tailored image as a defender of Brazilian sovereignty.
Former President Jair Bolsonaro, centre, in the Supreme Court. Photo credit: Gustavo Monero via Flickr
Another likely trigger for the tariffs is Brazil’s central role in the expanding BRICS coalition and its push to reduce trade dominated by the US dollar. July’s major BRICS summit, hosted by Brazil, reached a new milestone with ten full members and partner nations participating. As a co-founder of what was then named BRIC in 2009, Lula da Silva has consistently championed a multipolar political order that challenges the US’s power and the US reserve currency status. This development clearly threatens US interests, in particular the loss of dollar hegemony as a tool for global influence and the rise of a key BRICS member advancing that agenda from within the Western Hemisphere. Last week, Trump promised a 10 per cent tariff on all imported goods for ‘any country aligned themselves with the Anti-American policies of BRICS’. Steven Bannon, a close Trump ally and former CEO of Trump’s initial 2016 election campaign, said that ‘the president is pissed every time he looks at the BRICS de-dollarisation effort.’ Leland Lazarus, a former special assistant to the head of US Southern Command, that China and Brazil conducting trade in Yuan is ‘triggering alarms within Trump’s circle’. Lazarus also suggested thatmay be why he also threatened all BRICS members with a 10 per cent tariff, to try to peel off new members like Egypt, Ethiopia and Indonesia. Taken together these two statements from insiders of Trump’s circle indicate that punishing Brazil is as much about deterring further BRICS expansion as it is about domestic economic protectionism. Despite Trump claiming that BRICS pose no legitimate threat to American hegemonic power, he has repeatedly threatened economic sanctions against any country aligning with their coalition. If Trump were to somehow succeed in undermining Lula and assisting Bolsonaro back to power, he will fracture BRICS solidarity. However, if his approach is too heavy handed he risks bolstering Lula electoral chances. Similar backlashes have affected Trump-aligned electoral candidates in Australia, Canada, and Romania, as well as having pushed Brazil further out of Washington’s orbit.
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BRICS summit in July. Photo credit: India Prime Minster office via Wikimedia.
One possibility is that the tariffs are primarily aimed at pressuring Lula’s government to ease Bolsonaro’s legal prosecution and create political conditions for Bolsonaro to run in 2026. Another is that Trump is reacting to Brazil's leadership role in BRICS and the coalition's growth. A third scenario raises the possibility that the strategy involves a combination of these goals. Ultimately, given that Bolsonaro’s trial began in May and the BRICS summit concluded only a week ago, the timing suggests the summit likely triggered a decisive response.
It’s unclear how this escalation will end., Unlike previous stand offs with Latin American leaders such as Petro in Colombia, there is no clear off ramp. Bolsonaro’s trial brings into question the foundations of Brazil’s democracy and it is unlikely Lula will back down, especially when Lula served time in prison himself after a controversial corruption conviction that many view as politically motivated. Trump using economic levers to carry out his diplomacy goals, he risks Washington’ While Trump’s use of economic levers to pursue foreign policy objectives may be successful it also carries a risk of totally undermining US credibility and long-term influence in Latin America.
BIO: Alister Gibson is a third-year International Relations Student at the University of Adelaide and a regular contributor at ALELD. He has a keen interest in political order, history, and philosophy and is currently studying German and Spanish.
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