Why is drought-hit Brazil saying yes to AI data centers?
When AI data centers come to town, companies promise jobs and opportunities. In one drought-stricken community in Brazil, residents are weighing the choices. How do communities balance the economic boost and environmental cost of hosting water-reliant data centers?
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Al Jazeera
a day ago
- Al Jazeera
Trump's new Brazil tariffs could raise US beef prices
United States President Donald Trump's newly announced tariffs of 50 percent on Brazilian imports could drive up beef prices for US consumers. Unless the White House delays or reverses course, the tariffs are set to take effect on August 1. After China, the US is the second-largest importer of Brazilian beef. Brazil is currently the fifth-largest source of foreign beef for the US, and its share has grown in the past year, accounting for 21 percent of all US beef imports. That surge has been driven by domestic supply challenges, including widespread droughts and rising grain costs. In fact, imports doubled in the first half of this year compared to the same period in 2024 including because of the threat of upcoming tariffs. Analysts say should the tariff go into place, it will hit importers of ground beef, commonly used in hamburgers, particularly hard. 'They [US beef importers] will either have to pay the higher cost of Brazilian beef or obtain it from other higher-cost sources. That could lead to higher prices for certain beef products, particularly ground beef and hamburger meat. This comes at a time when the US cattle herd is at the lowest level in many decades, demand for beef is strong, and as a result beef prices are up,' David Ortega, a food economist and professor at Michigan State University, told Al Jazeera. The 50 percent tariff would bring the rate on Brazilian beef to about 76 percent for the rest of the year, Reuters news agency reported, citing livestock analysts. Some domestic trade groups, including the National Cattlemen's Beef Association (NCBA), have praised the White House for the looming tariffs. 'NCBA strongly supports President Trump holding Brazil accountable with a 50 percent tariff,' NCBA Executive Director of Government Affairs Kent Bacus said in a statement provided to Al Jazeera. 'For many years, NCBA has called for full suspension of imported Brazilian beef due to their abysmal lack of accountability on cattle health and food safety. Brazil's failure to report cases of atypical BSE [a neurological disease affecting cattle] and their history of [foot and mouth disease] is a major concern for America's cattle producer. 'A 50 percent tariff is a good start, but we need to suspend beef imports from Brazil so we can conduct a thorough audit and verify Brazil's claims [of safety and health practices].' In the 2024 election cycle, almost 95 percent of the political action committee representing the NCBA's donations went to Republican candidates, according to OpenSecrets. Rising costs The tariffs come as the US is already facing a decline in domestic beef production and increased reliance on imported beef. There are already other strains on the US beef market because livestock imports from Mexico are at a standstill following new health concerns — the spread of a flesh-eating parasite called a screwworm. At the same time, imports from Brazil were down in June on the back of the 10 percent tariffs the White House imposed in April across all countries while they each negotiated their trade deal with the US. 'Domestic beef producers may benefit in the short term from reduced competition. However, producers are facing high input costs and weather-related challenges that limit their ability to expand quickly,' Ortega added. Farmers in the US also have the smallest cattle herds in more than 70 years, and production is expected to decrease further by two percent by the end of the year. Because of pains in domestic supply, imports doubled in the first five months of the year compared to the same period last year. That began to decline last month as a result of the 10 percent blanket tariffs. Robert Perosa, president of Brazilian Beef Exporters Associations (ABIEC), an industry trade group, told reporters that the new tariffs would make it 'economically unfeasible' to continue to export to the US market. The move will raise costs for restaurants across the US. 'Dramatic tariff increases could affect menu planning and food costs for restaurants as they attempt to find new suppliers,' Sean Kennedy, executive vice president of public affairs at the National Restaurant Association, said in a statement provided to Al Jazeera. 'As we have said from the outset, our industry relies on a steady supply of imported goods that cannot be produced here in the US, and we urge the Trump administration to pursue policies that will secure fair trade agreements.' Al Jazeera reached out to the largest fast food restaurant chains in the US, including McDonald's, Burger King, Wendy's, Sonic Drive-In and Jack in the Box, but none responded. JBS and Marfrig, two of Brazil's largest beef producers, also did not reply to a request for comment. Markets respond Stock markets have been relatively muted in their response to Trump's tariff announcements this week. At the market close, the Dow Jones Industrial Average tumbled 0.6 percent, and the S&P 500 is down 0.33 percent for the day. The Nasdaq Composite Index is down 0.2 percent. JBS, which also has substantial beef production operations in the US, made a $200m investment earlier this year to expand two facilities in the US. The company's stock is up 0.4 percent for the day despite the challenges the tariffs will pose to its Brazilian beef business. Marfrig is down 3.98 percent for the day, although this comes as the company postponed a shareholder meeting for the second time for an unrelated pending acquisition of a poultry and pork processor.
Al Jazeera
2 days ago
- Al Jazeera
Trump's tariff threat to Brazil is a gift to Lula
In a provocative move that fuses foreign policy with ideological allegiance, United States President Donald Trump has threatened to impose a 50 percent tariff on all Brazilian exports, effective August 1, 2025. The announcement came in a letter posted on social media, in which Trump explicitly linked the proposed tariffs to two ongoing domestic issues in Brazil: the judicial proceedings against far-right former president Jair Bolsonaro – whom Trump described as the victim of a political 'witch-hunt' – and recent rulings by the Brazilian Supreme Court against US-based social media companies, including former Trump ally Elon Musk's X. By doing so, Trump has escalated a trade dispute into a direct attempt to influence Brazil's internal affairs – using economic pressure to serve political ends and undermining the country's sovereignty in the process. Brazilian President Luiz Inacio 'Lula' da Silva responded swiftly and unequivocally: 'Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,' he declared, adding that Brazil's judiciary is autonomous and not subject to interference or threat. Under Brazilian law, digital platforms are obligated to monitor and remove content that incites violence or undermines democratic institutions, and they may be held legally accountable when they fail to do so. While a 50 percent tariff on Brazilian exports might appear economically devastating, it could in fact become a strategic turning point – and even a blessing in disguise. Brazil has both the resilience and the diplomatic tools to weather this storm and emerge stronger. The United States is one of Brazil's largest trading partners, typically ranking second after China – or third if the European Union is considered as a single bloc. Brazilian exports to the US include industrial goods such as Embraer aircraft, iron and steel, crude oil, coffee and semiprecious stones, alongside agricultural products like beef, orange juice, eggs and tobacco. In return, Brazil imports large quantities of US-manufactured goods, including machinery, electronics, medical equipment, chemicals and refined petroleum. Notably, the US has maintained a trade surplus with Brazil for the past five years. Should Washington proceed with the 50 percent tariffs, Brasília has several retaliatory options under its Economic Reciprocity Law. These include raising import tariffs on US goods, suspending clauses in bilateral trade agreements, and – in exceptional cases such as this – withholding recognition of US patents or suspending royalty payments to American companies. The impact on US consumers could be immediate and tangible, with breakfast staples like coffee, eggs and orange juice spiking in price. Brazil is not without friends or alternatives. The country has already been deepening ties with fellow BRICS members (China, India, Russia, South Africa) and newer partners in the bloc. This dispute only strengthens the case for accelerating such integration. Diversifying export markets and embracing South-South cooperation isn't just ideological; it's economically pragmatic. Closer to home, the tension presents an opportunity to reinvigorate South American integration. The long-held regional dream of enhanced collaboration – from trade to infrastructure – could gain new momentum as Brazil reassesses its global alignments. This realignment could breathe life into stalled Mercosur bloc initiatives and reduce dependence on an increasingly erratic relationship with the US. Ironically, Trump's aggressive move may weaken his ideological allies in Brazil. While Bolsonaro supporters (including members of his family) have praised the US president's intervention, they may be missing its broader political consequences. Trump's past influence abroad has often backfired, with right-wing candidates in countries like Canada and Australia paying the price. A similar outcome in Brazil is not unthinkable. Lula, who has consistently positioned himself as a pragmatic, diplomatic and stabilising global figure, may gain political ground from this latest episode. His defence of sovereignty, democratic institutions and balanced international relations could resonate more deeply with Brazilian voters ahead of next year's elections. This moment need not be seen as a crisis. Rather, it presents a pivotal opportunity for Brazil to assert itself as a sovereign economic power – less reliant on Washington and more engaged with an emerging multipolar global order. If Lula navigates it wisely, Trump's latest provocation may deliver not only a diplomatic win but a significant boost to his re-election prospects. In attempting to punish Brazil, Trump may well have undercut both his foreign policy ambitions and his ideological allies abroad. The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera's editorial stance.
Al Jazeera
3 days ago
- Al Jazeera
What's behind Trump's 50 percent tariff for Brazil despite trade surplus?
United States President Donald Trump has threatened Brazil with a 50 percent tariff, citing the criminal charges against its former president and his political ally Jair Bolsonaro, who is accused of plotting a coup. In a letter to Luiz Inacio Lula da Silva, Brazil's current president, Trump said on Wednesday that the treatment of Bolsonaro, who refused to publicly concede the presidential election that he lost to Lula in 2022, 'is an international disgrace'. The letter was one of 22 tariff notices Trump sent this week to various countries. On Monday, the president extended a pause on his sweeping global tariffs from Wednesday to August 1. For the most part, Trump says he is trying to rebalance large trading deficits, whereby the US imports more from a country than it exports there. But the US has a trade surplus with Brazil, and the tariff threatened against South America's largest economy was higher than those received by other countries, which have mostly fallen in the range of 25 to 40 percent. The escalation in tensions between the US and Brazil came as Lula hosted representatives from China, Russia, Iran and other nations for a BRICS summit of emerging economies in Rio de Janeiro this week. Leaders attending the summit criticised Trump's tariffs and the recent US and Israeli bombing of Iran, drawing threats from Trump of a 10 percent additional tariff for 'anti-American' BRICS-aligned countries. What has Trump announced in relation to Brazil? Trump has continued to publish letters informing US trading partners of tariffs planned to begin on August 1 if they can't reach trade deals with his government before that. So far, he has sent 22 letters to heads of state. More could still come. While the letters have mostly denounced trade between those countries and the US as 'far from reciprocal', Trump's letter to Lula was stronger. He wrote that 'due in part to Brazil's insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans', he planned to levy a 50 percent tax on Brazilian goods exported to the US. 'Please understand that the 50 percent number is far less than what is needed to have the Level Playing Field we must have with your Country,' Trump added. 'And it is necessary to have this to rectify the grave injustices of the current regime.' He said: 'The way that Brazil has treated former President Bolsonaro, a Highly Respected Leader throughout the World during his term, including by the United States, is an international disgrace.' How has Brazil responded? Lula promised to hit back with tariffs of his own if Trump follows through with his threat. 'Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage,' Lula said in a post on X. He added that the criminal case against Bolsonaro, who challenged the outcome of Brazil's 2022 election, is a matter solely for the justice system and 'not subject to interference or threat'. Why is Trump targeting Brazil when the US has a trade surplus? According to the Office of the US Trade Representative, the US imported $42.3bn of goods from Brazil in 2024 and exported $49.7bn. In short, Brazil's purchases from the US amounted to roughly $7.4bn more than US purchases from Brazil. Ever since the announcement of his 'Liberation Day' tariffs, on April 2, Trump has consistently stated his desire to reduce America's trade deficits with its trading partners. In Trump's view, deficit countries, such as the US, import goods that could have been produced at home, harming domestic employment and economic growth in the process. However, 'Brazil has historically run a small trade deficit with the US', said Elizabeth Johnson, an economic analyst at TS Lombard, a strategy and political research firm. 'It is very much political. … It is part of the Bolsonaro family's effort to get Trump to weigh in on the ongoing trial of Jair Bolsonaro.' Indeed, this is not the first time Trump has used the threat of tariffs to try to alter other countries' domestic policy decisions. Since returning to office in January, he has threatened a 25 percent tariff on Colombian goods and said he would double that if the country refused to accept deportees from the US. Colombia ultimately accepted his terms. What trade does the US do with Brazil? In 2023, the balance of trade (imports plus exports) between the US and Brazil amounted to $104bn, making Brazil the US's 15th largest trading partner. Top US exports to Brazil last year included aircraft and spacecraft (amounting to about $7bn), fossil fuels ($9bn) and industrial machinery such as nuclear reactors and electrical equipment (roughly $10bn), according to US Census Bureau data. Brazil's exports to the US in 2023 were led by crude oil and fossil fuels (about $8.8bn), iron and steel products ($5bn) and soya beans ($3.3bn). What impact could a 50 percent tariff have on Brazil's economy? It could severely hurt companies highly exposed to the US market. In particular, firms in the base metals and agricultural sectors could be badly hit. According to Johnson, Trump's tariff threat could be a drag on economic growth because the US is Brazil's second largest export market after China. Indeed, Goldman Sachs has calculated that Brazil's exports to the US represent 2 percent of its gross domestic product and Trump's tariffs could cut its economic growth by 0.3 to 0.4 percentage points. What impact could this have on the US economy? If the tariffs are implemented, US firms that buy Brazilian goods would most likely have to find alternative sources for those products, and this could take time. In the meantime, 'the semifinished steel products from Brazil used in American manufacturing mean [that higher tariffs would be] a negative,' Johnson told Al Jazeera. In addition, 'beef, orange juice, coffee' and other farm products travelling from Brazil into the US would become much more expensive, she said. On the other hand, Johnson suggested, 'There's room for Trump to score a win with Brazil by allowing more ethanol exports into the US, which would help [American] farmers.' What charges is Bolsonaro facing in Brazil? Bolsonaro, who was president of Brazil from 2019 to 2023, refused to concede his presidential election loss to his left-wing rival in 2022. Bolsonaro raised questions about the accuracy of the election result, claiming that some electronic voting machines had been faulty. Shortly after Lula took office in January 2023, thousands of Bolsonaro's supporters angered over the election result stormed the presidential palace, Congress and the Supreme Court in the capital, Brasilia. Now, Bolsonaro is facing criminal charges for allegedly plotting a coup and for alleged actions he took to overturn the 2022 election result. Bolsonaro and 33 other people were charged this year, and the ex-president's case is being heard by the Supreme Court. He could face 40 years in prison if found guilty. Bolsonaro has denied any wrongdoing and has framed the trial as a politically motivated attack. Trump, who also falsely claimed he had beaten Joe Biden in the 2020 presidential election, had faced criminal charges related to seeking to overturn that election. His supporters also stormed the US Capitol before Biden took office, seeking to stop the certification of the election results. Trump has highlighted what he regards as parallels between himself and Bolsonaro. On Monday, he wrote on social media that he empathised with what was happening to Bolsonaro: 'It happened to me, times 10.' Which other countries were notified of new tariffs? Other than Brazil, recipients of tariff letters on Wednesday included the Philippines, Moldova, Sri Lanka, Brunei, Libya, Algeria and Iraq. They were notified of tariffs as high as 30 percent. The rates Trump said would be imposed on Sri Lanka, Moldova, Iraq and Libya were lower than those he initially announced in early April. Tariffs on goods from the Philippines and Brunei were higher. The rate for goods from Algeria remained the same. Trump has said companies that move production to the US will be exempt from tariffs. But he also warned that if countries retaliate, they could face even higher US duties. The US and its largest trading partners have been negotiating trade deals since Trump announced the tariffs. But so far, only Vietnam and the United Kingdom have reached new deals while a partial agreement has been reached with China. More recently, Trump administration officials have indicated that deals with India and the European Union may be imminent.
