US President Donald Trump has threatened Brazil with import tariffs of up to 50 percent, following dissatisfaction with the criminal prosecution of his ally Jair Bolsonaro. The high-profile move triggers the largest "reciprocal" tariff increase of 2025 and offers critical lawyers and companies new arguments in their proceedings against Trump's trade policies.
Lawyers litigating in Washington against the broad tariff scheme based on the International Emergency Preparedness Act (IEEPA) point out that it appears to take Trump far beyond his legal authority. Whereas previous levies were motivated by fighting "unjustified" trade deficits, this measure now explicitly targets political spite, opponents argue. In an ongoing case, a lower court has already ruled that Trump may not use IEEPA to tax virtually all trading partners, but the tariffs remain in place for now until appeals are completed.
For Brazil, the second-largest U.S. market behind China, the stakes are high. Although Brazil hopes to reach a more favorable agreement by Aug. 1, that deadline seems unlikely given Trump's extensive claims. Meanwhile, companies, from Japan to the European Union, are conducting negotiations to moderate their tariffs as yet.
Critics fear that Trump's erratic tariff threats are undermining confidence in the predictability of global trade. They warn that trade disputes will thus become increasingly political rather than in trade forums or courts. At the same time, the United States is playing a double whammy; on the one hand, IEEPA levies are being legally challenged; on the other, the administration is working on alternative measures under existing trade laws to maintain its dominance.
The dispute promises to simmer on for a long time and will in all likelihood be fought all the way to the Supreme Court. For exporting entrepreneurs worldwide, it has become clear that trade risks henceforth depend not only on economic setbacks, but also on geopolitical sentiments and legal rules of the game.
