Trump Slaps 50% Tariffs on Brazil Over Censorship, Political Persecution — Europe Take Note
Tariffs take effect August 1. Trump cites jailing of opposition leader Bolsonaro and 2024 censorship of Elon Musk’s X platform as justification.
Donald Trump is ready to impose 50% tariffs on Brazil. This is a major policy shift: for the first time, censorship of an American tech company is being treated as a tariff-worthy offense.
If you’re in Brussels, pay attention.
According to Trump’s letter to President Lula dated July 9, this is no longer just a threat, but an official policy. Tariffs go live August 1. Brazil will then have higher baseline tariffs than China. In fact, Lula’s Brazil, for all its political witch hunting against ex-President Jair Bolsonaro and “protection of Democracy”, now has the highest barrier of entry into the United States than any other country on the planet. Parabens.
There is room for negotiation, I suppose. But considering the one issue Trump laid out up top requires the Lula appointed megalomaniac Supreme Court judge Alexandre Moraes end the political persecution of Bolsonaro, the Workers’ Party biggest sworn enemy, it is unlikely Brazil gets a reprieve.
Still, this pressure could lead to surprises. The case against Bolsonaro, which may yet put him in prison, is politically radioactive in Brazil.
Note here that Trump called out the censorship of Twitter, now X, owned by Elon Musk. This led to them closing offices in Brazil or risk arrest for not revealing the real names of anonymous account holders that apparently “threatened” Moraes (he says) during a trip to New York City.
Musk paid Brazil around $7 million in fines. The company went dark in Brazil for nearly a month between August 30 and October 8, 2024.
Lula should know something about political witch hunts.
In his mind, and the mind of Workers’ Party (PT) supporters, he was also the victim of one. The Petrobras Car Wash scandal never proved he had his hand in any of the actual theft of funds, but he was nailed for accepting a bribe from a civil engineering firm called Odebrecht for awarding them a lucrative Petrobras construction gig. He was sentenced for 12 years and one month, later got it reduced to 8 years, and was released in under two years.
Leaked documents showed that a court, led by then super famous judge Sergio Moro, and his team were biased against Lula. The Supreme Court then basically said Lula was wrongfully imprisoned, let him out of what was basically a safe house jail, not a traditional Brazilian prison full of criminals and killers, and allowed him to run for office again.
Bolsonaro then lost to Lula, helped along by the globalist left from the U.S. and Europe who saw Bolsonaro as the “Tropical Trump” against their beloved lockdown and mandatory Covid vaccination policies. Trump fell in the Covid years. Bolsonaro fell in the Covid years. The U.S. and European left got their man — Lula.
And now Lula, once considered the symbol of Brazil’s working class, now has the same style and rhetoric of the faculty lounge in New York, or your garden variety European liberal. Lula has more in common today with the 21 gendered activists of San Francisco and Greta Thunberg than he has with members of the CUT union at the car factories in ABC Paulista. He has gone from the “pai do Brasil” to something akin to a Western NGO director.
Bolsonaro is subject to his own political witch hunt. Like Trump, he is blamed for fomenting an insurrection. Spare us all, please.
“Lula is a Loser”
There. I said it. Those are my quotes.
I was in Brazil when he first won the presidency in the early 2000s. It was quite the time. He was very impressive. He was the most popular president in the Americas, if not the world. He is a different man now.
His approval rating is below 30%. The only political figure with a less attractive approval rating is his wife, Janja.
During the recent BRICS Summit in Brazil — where the locals say that the reason Xi Jinping didn’t show up was because he didn’t want to be anywhere near Janja — Lula spoke about moving away from the dollar. Either he did not know that Trump had threatened countries who seek to end dollar transactions, or he did know and did not care because he sees a move away from the dollar as a sovereign, if not wise, choice. Regardless, it clearly rubbed Trump the wrong way.
Now they are faced with record high tariffs. In May, some of my guys predicted that Brazil’s interest rates would hit 16.5% this year. It’s now 15%. The call was based on a total lack of trust in the PT government. If tariffs rise on August 1 to 50%, Brazil will be hard pressed to cut interest rates. Actually…not a chance they cut.
Brazil investors now are betting on the reversal of 50% tariffs and an easing of tensions. I am not sure it is the safest bet. The shorts might own this market for a while.
EWZ 0.00%↑ fell nearly 2% on Wednesday on tariff letter day, and fell 1.5% the day after.
Warning to Europe?
I am really curious now what the letter to Urusla van der Leyen about European Union tariffs will say. No countries have fined American social media companies for “hate speech” and “disinformation” more than the globalist Euros.
X was warned by the European Commission (especially Thierry Breton) for failing to remove hateful and misleading content, especially during wartime crises (e.g., Hamas–Israel conflict in 2023–24).
Germany has one of the strictest enforcement mechanisms under the Network Enforcement Act. Yet again, X has been investigated for users posting hate speech, and “far-right” content.
I suppose the Brits were never punished for their Online Safety Act, which also imposes steep fines against U.S. social media companies. Brits got their trade deal with the U.S. and has 10% tariffs, plus a tariff rate quota on steel.
Back in February, Preston Byrne, senior fellow at the Adam Smith Institute, said during an event in the U.K.:
“We have a vice president of the United States who told Europe that you are going to have to knock this stuff (censorship) off because there is a new sheriff in town. And so for at least the next four years, the idea that Europe and the U.K. are going to boss around the United States is not going to happen anymore. If you do it (censorship), we are going to hit you with 50% tariffs and your country is going to go bankrupt.” — Preston Byrne.
Brazil is living that warning.
Europe, you’re on deck.