Brazil-US Tariff War Escalates as Lula Vows Retaliation

Brazilian President Luiz Inácio Lula da Silva has expressed concern that the tariff war with the United States, initiated by President Donald Trump, could be protracted and endless. The escalation began when Trump threatened to impose a 50% tariff on Brazilian goods starting August 1. In response, Lula da Silva vowed to impose retaliatory tariffs on the United States if Trump followed through on his threat. This move by Trump was seen as a significant escalation in the ongoing trade dispute between the two countries.

The roots of the dispute lie in Trump's accusation that Brazil has been conducting a "witch hunt" against Jair Bolsonaro, who is facing legal troubles. Trump's intervention in Brazilian affairs has been seen as an attempt to support Bolsonaro, who has been a vocal ally of the Trump administration. However, this move has put Bolsonaro in a difficult position, as it has opened the door for his political opponents to accuse him of being a puppet of the United States.

Lula da Silva, who is currently in a trade fight with Trump, has stated that there is no economic rationale for the tariffs imposed by Trump. He argues that Brazil buys more from the United States than it sells, making the tariffs economically irrational. The Brazilian government has also stated that it has no power to end the legal proceedings against Bolsonaro, as Trump has demanded.

In response to the tariffs, the Brazilian government plans to move closer to countries like Indonesia, Canada, and Japan via Mercosur, the South American customs union of which it is a member. This move is seen as an attempt to blunt the impact of the tariffs on Brazilian exports. The government has also stated that it is up to Bolsonaro and Trump to fix the mess they have created.

The dispute has also highlighted the political divisions within Brazil. Bolsonaro's supporters have been divided over the tariffs, with some calling for negotiations and others blaming Lula for the imposition of the tariffs. Lula, on the other hand, has seized on Trump's attacks to boost his approval ratings, which have been stuck below 50% for months.

The dispute has also raised questions about the future of US-Brazil relations. Trump's intervention in Brazilian affairs has been seen as a violation of Brazil's sovereignty, and it remains to be seen how the dispute will be resolved. However, one thing is clear: the tariff war between the two countries could be endless, with both sides digging in their heels and refusing to back down.