On 30 July, President Trump issued an executive order raising tariffs on Brazilian goods by 40%, totalling 50% when added to the 10% baseline announced in April. Invoking emergency powers under the International Emergency Economic Powers Act (IEEPA) and the National Emergencies Act (NEA), the justification wasn’t an economic threat, but Brazil’s domestic legal actions, particularly Supreme Court measures against the spread of misinformation in social media platforms and the trial of former president Jair Bolsonaro, accused of undermining Brazilian democracy. This represents economic coercion, violating the principle of non-intervention, which prohibits interference in the domestic affairs of sovereign states, and WTO rules. The blog focuses on how these trade tariffs are a tool to achieve geopolitical goals in the pursuit of hegemonic leadership.

The executive order targeting Brazil breaches US obligations in the GATT: Article II:1(b), which binds it to agreed maximum tariff rates, and Article I:1 (most-favoured-nation treatment), which requires equal treatment of all WTO members. It doesn’t meet the requirements of a national security exception under Article XXI as interpreted by WTO jurisprudence. The measure also breaches Article 23 of the DSU, which prohibits unilateral trade retaliation. More than violating such commitments, the US administration is subverting international trade law, attempting to create a new trade regime based on its understanding of core principles (for example, reciprocity) and its new trade deals, whose general and unclear terms have been replicated with little change. These initiatives only add to the uncertainty and unpredictability of trade relations, particularly given the volatility of the announced decisions.

The tariffs against Brazil were postponed until 6 August (the previous deadline was 1 August) and include almost 700 exceptions, such as orange juice, minerals, oil and airplanes (coffee being notably absent). These carveouts may suggest pressure from US industries reliant on Brazilian imports, highlighting how such measures harm not just bilateral relations and exporters but also US businesses and consumers alike. They also show that close consultation between Brazilian and US industries affected by the tariffs is key to building pressure on Washington. The US is Brazil’s second-largest trading partner and has a trade surplus. As the executive order makes it clear, the reasons behind the tariffs are not economic; they send a geopolitical message.

This move aligns with Trump’s broader rhetoric. In April, the US Defence Secretary Pete Hegseth said the Trump administration was “taking our backyard back” by investing “in ways that serve American interests in our backyard”. This aims to curb China’s influence in Latin America. But this vision, rooted in the Monroe Doctrine of 1823 and reinforced in 1904 by the “Big Stick Diplomacy” and in 1989 by the Washington Consensus, reflects an outdated mindset of hemispheric control – political, economic and cultural – to benefit US interests.

China overtook the US as Brazil’s largest trading partner in 2009. Brazil and China have grown economically closer through their BRICS partnership, which promotes cooperation among emerging economies. Recently, China’s investment portfolio in Brazil, the largest recipient of Chinese FDI in Latin America, has shifted to developing ‘new infrastructure’ related to the green and digital economy. This includes using Huawei equipment to build 5G networks, despite US warnings. China is challenging the US economic supremacy by increasing its FDI in strategic sectors essential for maintaining global leadership, such as technological innovation and renewable energy.

Turning the attention to the BRICS, the bloc has expanded its membership and advances a narrative that challenges the US power, focusing on collective action and giving voice to the global South. The group has alluded to the creation of a new currency to rival the US dollar, with Lula repeatedly calling on developing countries to replace the US dollar in international trade. Trump sees the BRICS initiatives as “anti-American policies”, threatening to impose tariffs on any country aligning with the bloc.

By targeting Brazil over its judiciary’s actions against misinformation and the prosecution of Bolsonaro, Trump is defending a global power structure where US-based big tech remains largely unregulated. These sanctions could also signal to other countries considering similar accountability measures, reinforcing a US-centric digital and political order. Brazil challenges this project, prompting a response that could be designed as much to deter others as to punish Brazil.

Up to this point, Lula’s presidency followed an “active non-alignment”, seeking Brazil’s interests instead of being drawn into the conflicts between major powers. The new tariffs force a shift. The US remains a key trading partner whose new measures cannot be ignored, and relying too heavily on a single partner like China carries significant risks. Brazil needs to balance its economic and strategic relationships.

Internationally, if Lula wants to gather support and challenge the US’s illegal measures, he must take stronger positions. He recently recognised the importance of functioning multilateral institutions. At the July WTO General Council, Brazil, backed by 41 members, denounced the US for unilaterally breaching WTO rules and called for defending the multilateral trading system. This gives momentum for coordinated responses, including WTO disputes or joint measures to uphold multilateral trade rules. The issue is how to articulate this when some of the main international players are entering into trade deals that set a dangerous precedent for the world. Beyond pursuing a collective action, Brazil is also hoping for the approval of the EU-Mercosur agreement as a way to diversify its trade relationships and expand market access with European countries.

Domestically, Brazil is ready to act. The new anti-coercion law (Lei no. 15.122/2025), passed in the wake of “Liberation Day,” allows Brazil to suspend trade concessions, investment protections, and intellectual property obligations in response to unilateral measures that harm its competitiveness. This framework empowers Brazil to retaliate strategically, mirroring its successful use of cross-retaliation in the WTO Cotton case against the US, where it threatened to suspend IP rights to pressure compliance. Having learned from that dispute, Brazil could again use proportionate responses within WTO rules to challenge the tariffs, targeting sensitive sectors in the US. The Trump administration’s negotiation style, centred around the president, gets in the way of open dialogue. The Brazilian government must continue articulating with businesses to pressure Washington.

As Sancho Panza warned Don Quixote, “what you see over there aren’t giants—they’re windmills.” Trump’s Brazil tariffs, like tilting at imagined – or self-created – threats, reflect a futile attempt to reassert dominance over Latin America. But invoking emergency powers and imposing tariffs on dubious legal grounds does not strengthen US leadership; it reveals its insecurities over a shifting global order. These tariffs are a misguided effort to revive an illusion of hemispheric control, at odds with international law and economic cooperation.

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