Latest news with #Lula
Al Jazeera
8 hours ago
- Business
- Al Jazeera
Trump's hefty tariff on Brazil expected to push the country towards China
When Brazilian President Luiz Inacio Lula da Silva was in China earlier this year for his third meeting with Xi Jinping since returning to office in 2023, he hailed the relationship between the two countries as 'indestructible'. That proximity will likely increase even more following United States President Donald Trump's announcement of a 50 percent tariff on Brazilian imported goods for overtly political reasons, experts say. 'The reality is that, today, the relation between Brazil and China is much more positive and promising than the one with the United States,' said Tulio Cariello, director of content and research at the Brazil-China Business Council (CEBC). Trump's pledge to inflict a 50-percent tariff on Brazil, due to come into effect on August 1, sent shockwaves throughout Brazil, especially since under the so-called 'Liberation Day' tariffs that Trump had announced on April 2, Brazilian imports would be taxed at 10 percent. That was also significantly less than percentages inflicted on other Brazilian competitors in the American market, prompting a sense of opportunity among businesses in South America's most populous country. Hence, the sudden decision of a 50-percent tariff was a rude shock, particularly for sectors that are big exporters to the US, such as aircraft, car parts, coffee and orange juice. The 50-percent tariff came on the heels of the BRICS summit in Rio de Janeiro, where leaders of developing nations raised 'serious concerns' about the increase of tariffs which it said were 'inconsistent with WTO [World Trade Organization] rules.' In a letter justifying the tariff, Trump directly tied the measure to former Brazilian President Jair Bolsonaro's current predicament, which he called a 'witch hunt'. Bolsonaro, often dubbed the 'Trump of the tropics', is facing trial for allegedly attempting to orchestrate a coup to remain in power despite his 2022 election loss to Lula. Trump also erroneously claimed a trade deficit with Brazil. Brazil has a deficit of about $7.4bn with the US, and a surplus of about $31bn with China. The political nature of the tariffs marked a sharp departure from Trump's usual rationale, drawing widespread condemnation across Brazil's political spectrum, and from China. 'Tariffs should not be a tool of coercion, intimidation, or interference,' a spokesperson for China's Ministry of Foreign Affairs said in the aftermath. By using tariffs for political leverage rather than economic reasons, Trump risks tarnishing the US's reputation as a reliable trade partner, experts say, making China appear more stable and predictable by comparison. 'China, to date, has shown no indication of backtracking on decisions or making sudden changes,' said Mauricio Weiss, an economics professor at the Federal University of Rio Grande do Sul. Strengthening Chinese ties The Asian country overtook the US as Brazil's biggest export market in 2009, and the two countries' trade and investment ties have only grown stronger since then. A notable signal of deepening ties came on Monday, when Brazil's Ministry of Finance announced plans to establish a tax advisory office in Beijing. Brazil only has four other such offices globally – three in South America and one in the US. 'The motivation is not politically driven, but rather justified by the growing importance of bilateral trade relations and the need to deepen cooperation on fiscal and customs matters,' Brazil's ministry said in a statement to Al Jazeera. China has sought to fuel its own domestic growth through access to natural resources and raw materials, such as oil, iron ore, copper, lithium and agricultural products. But since 2007, China has also invested more than $73bn in Brazil, according to CEBC. Much of those funds are pouring into strategic sectors such as energy, infrastructure, agribusiness and technology. 'The United States still invests more heavily in Brazil, but China's investments are more targeted and coordinated between governments,' said Weiss. Chinese products are also becoming increasingly common in Brazil. Electric cars made by Chinese manufacturer BYD are now a common sight, with seven out of 10 electric vehicles sold in Brazil coming from the company. Particularly symbolic of China's growing presence to the detriment of the US was BYD's purchase of a massive factory previously owned by Ford in Brazil's northeastern state of Bahia. The two countries have also agreed to explore transportation integration. Those plans include a bi-oceanic rail corridor linking Brazil to the Chinese-built port of Chancay in Peru. Xi's inauguration in November of the mega-port – where total investment is expected to top $3.5bn over the next decade – put China's regional influence on stark display. Other Latin American nations, including Peru, Colombia, and Chile, have also signalled their rapprochement with China, amid fears of Trump's intentions for the region. He has previously pledged to 'take back' the Panama Canal, including by force. But some have pointed out the deepening relation between China and Brazil does not mean the South American country will start exporting the goods it currently sends to the US to China, as the two countries buy very different products from Brazilian companies. 'Brazil isn't going to export manufactured products to China. That doesn't make much sense,' said Livio Ribeiro, a researcher at the Brazilian Institute of Economics at the Getulio Vargas Foundation. Even then, Chinese investments could play a crucial role in enabling Brazil to boost its industrial capacity and diversify its economy, according to Weiss. 'Simply being able to produce more of these products domestically and for other South American partners will already be a significant growth opportunity,' Weiss said. Speaking during a state visit in China in May, Lula said Brazil and China will be 'indispensable partners' because 'China needs Brazil and Brazil needs China.' 'Together, we can make the Global South respected in the world like never before,' Lula added.
CNN
14 hours ago
- Politics
- CNN
Brazil's President Lula says Trump was ‘not elected to be emperor of the world,' as US-Brazil spat escalates
Brazilian President Luiz Inácio Lula da Silva has hit back at Donald Trump's tariff threats, saying that his American counterpart was elected as the leader of the United States and 'not to be the emperor of the world.' Last week, Trump threatened Brazil with crippling tariffs of 50% starting August 1, according to a letter posted to his social media platform, Truth Social. In the letter, Trump linked the astronomical tariff threat to what he described as a 'witch hunt' trial against Brazil's right-wing former president, Jair Bolsonaro. Bolsonaro, a close Trump ally, is facing trial in Brazil for allegedly attempting to overthrow Lula following his presidential win in 2022. He could face more than four decades behind bars if found guilty of masterminding the coup. Speaking exclusively to CNN's Christiane Amanpour on Thursday, da Silva, who is widely known as Lula, said that Trump's threats had broken away from 'protocol' and argued that his predecessor's fate cannot be part of trade negotiations. 'The judiciary branch of power in Brazil is independent. The president of the Republic has no influence whatsoever,' he said, adding that Bolsonaro 'is not being judged personally. He is being judged by the acts he tried to organize a coup d'etat.' Bolsonaro has denied wrongdoing. On Friday, Trump posted a letter to Bolsonaro on Truth Social, in which he suggested the former Brazilian leader was the victim of an 'unjust system' and saying that he would be 'watching closely.' Lula said Trump would be standing trial in Brazil if the actions he took during the January 6 insurrection had been committed in the South American country. 'If Trump was Brazilian and if he did what happened at Capitol Hill, he'd also be on trial in Brazil. And possibly he would have violated the Constitution. According to justice, he would also be arrested if he had done that here in Brazil,' he said. Speaking through an interpreter, Lula also expressed disappointment at Trump's approach, saying at first that he couldn't believe the US president's social media post was authentic. 'It was very unpleasant,' he told Amanpour. 'I thought it was fake news.' Brazil has now vowed reciprocal tariffs if Trump follows through with his threat, marking the first time in months another country has challenged Trump in the face of tariffs. 'Brazil is to take care of Brazil and take care of the Brazilian people, and not to take care of the interests of the others,' Lula said, adding: 'Brazil will not accept anything imposed on it. We accept negotiation and not imposition.' Unlike the more than 20 other countries that have received letters from Trump this month, the US ran a $6.8 billion trade surplus with Brazil last year. That means that the US exported more goods to Brazil than it imported from there – an imbalance that should already satisfy Trump's trade agenda. Top US exports to Brazil in 2024 included aircraft and spacecraft, fuels, industrial machinery like nuclear reactors, and electrical equipment, according to US Census Bureau data. A retaliatory 50% Brazilian tariff on American goods could severely harm these industries. Still, Lula underscored his willingness to come to an agreement with Washington on Thursday, saying that it is up to Trump to 'seriously' consider negotiation and that he hopes the US president will change his mind. 'I'm not a progressive president. I am the president of Brazil. I don't see President Trump as a far-right president. I see him as the president of the US – he was elected by the American people,' the former labor organizer told Amanpour, dismissing the possibility that their ideological backgrounds could embitter negotiations. 'The best thing in the world is for us to sit around a table and talk,' he added. 'If President Trump is willing to take seriously the negotiations underway between Brazil and the US, then I'll be open minded to negotiate whatever may be necessary. But what is important is that the relationship between the two countries cannot go on like this,' he said. Meanwhile on Tuesday, the US launched an investigation into what it called 'unfair' trading practices by Brazil, escalating the spat with the world's 10th largest economy. The investigation will focus on digital trade and electronic payment services, preferential tariffs, and anti-corruption interference, as well as intellectual property protection, to determine whether there are 'unreasonable or discriminatory and burden or restrict' American commerce, according to a statement by the United States Trade Representative (USTR). It will also look into ethanol market access and illegal deforestation. CNN's Elisabeth Buchwald, Lily Farrant and Ana Bickford contributed reporting.
Bloomberg
a day ago
- Business
- Bloomberg
Brazil Reduces Spending Freeze After Judge Upholds Lula Tax Plan
Brazil announced a reduction of the total amount of its spending freeze for this year after the Supreme Court reinstated the bulk of a tax decree that had sparked disputes with Congress and added to uncertainty about its fiscal outlook. President Luiz Inacio Lula da Silva's government said Tuesday it would freeze a total of 10.7 billion reais ($1.9 billion), down from the 31.3 billion reais it had previously announced in May.
New York Times
a day ago
- Automotive
- New York Times
Chinese Cars, Brazil Style
Hello from your former newsletter anchor. It's been a minute. I want to tell you about what I learned in Brazil. For more than a century, cars, powered by gasoline, have been central to American power in the world. But the race to build the cars of the future is beginning to turn to China's favor. Those cars are powered by batteries. It's part of one of the most consequential shifts happening in the world today. So I went to Brazil earlier this year to find out more. Why Brazil? Because Brazil is Latin America's largest economy, and the world's sixth largest car market. Brazilians love cars and for many years, American automakers made cars in Brazil. Ford once built a Model T in its Brazilian factory. European car companies set up factories too, followed later by Japanese and Korean brands. And the government of Luiz Inácio Lula da Silva, Brazil's president, wants to bring down climate emissions from its transportation sector. Over the last few years, Chinese carmakers had been shipping lots of cars to Brazil. They are cheaper than many American and European models, they drive well and they are popular with Brazilians. All of that alarmed legacy carmakers in Brazil and, in turn, the Brazilian government. The government wanted these battery-powered cars of the future, but it also wanted to have a piece of the value chain. So Brazil announced a new policy: If you want access to our market, build cars here. Want all of The Times? Subscribe.
Free Malaysia Today
2 days ago
- Politics
- Free Malaysia Today
Lula slams US sanctions on Brazilian judges in Bolsonaro case
Luiz Inacio Lula da Silva voiced solidarity with Brazil's top justices over the US visa sanctions. (EPA Images pic) BRASÍLIA: Brazilian President Luiz Inacio Lula da Silva on Saturday denounced US visa sanctions on judges in the coup case against former leader Jair Bolsonaro, a right-wing ally of Donald Trump. 'My solidarity and support go to the justices of the Supreme Federal Court, who have been affected by yet another arbitrary and completely baseless measure by the United States government,' Lula said in a statement posted on X. 'The interference of one country in another's justice system is unacceptable and violates the basic principles of respect and sovereignty between nations.' Bolsonaro is on trial for allegedly seeking to stay in power by overturning the 2022 election won by Lula. Supreme Court judge Alexandre de Moraes ruled Friday that Bolsonaro must wear an electronic monitoring device, stay home at night and stay off social media as he awaits a verdict. Hours later the US revoked the visa for Moraes and his 'allies' on the court, as well as their immediate family members. 'Brazilian Supreme Federal Court Justice Alexandre de Moraes's political witch hunt against Jair Bolsonaro created a persecution and censorship complex so sweeping that it not only violates basic rights of Brazilians but also extends beyond Brazil's shores to target Americans,' Secretary of State Marco Rubio said in a statement. Moraes, one of the judges in Bolsonaro's trial for allegedly seeking to nullify Lula's election victory, said the restrictions were necessary given the 'hostile acts' against Brazil by the accused and his son and former politician Eduardo Bolsonaro. He said in a ruling Saturday that Eduardo Bolsonaro 'intensified the illicit conduct… through various posts and attacks on the Federal Supreme Court on social media' in reaction to Friday's ruling. Moraes cited a Facebook post in which the younger Bolsonaro called the judge 'a gangster in robes'. Both Trump and Bolsonaro have claimed to be victims of political persecution, and the former frequently verbally attacks judges at home over their rulings.
