Brazilian economy is ready to ride out Trump's 50% tariff

Brazilian goods imported by the United States carry one of the highest tariffs imposed by President Donald Trump, but that will not likely derail Latin America’s largest economy, due to ample exemptions and stronger trade ties with China.

- MARCELA AYRES BERNARDO CARAM

The lower stakes for the Brazilian economy give President Luiz Inacio Lula da Silva more room to stand his ground against Trump than most Western leaders, after calling him an unwanted global "emperor" and comparing his tariff threats to blackmail.

Mr Lula has said he is open to negotiating a trade deal but dismissed Trump's complaints about the trial of right-wing ally Jair Bolsonaro as a threat to Brazilian sovereignty and judicial independence. Brazil’s Supreme Court is trying the ex-president for allegedly plotting to overturn the 2022 election he lost to Mr Lula.

Those tensions, stoked by Mr Bolson-aro’s house arrest last Monday, are likely to make negotiations about the 50% US tariff on Brazilian goods between Washington and Brasilia thorny and drawn out, even as the fallout for Brazil’s economy looks limited.

Unlike Mexico and Canada, which sell about three-quarters of their exports to the United States, Americans buy just 12% of Brazilian exports. By comparison, Brazil’s exports to China have doubled in value over the past decade, now accounting for 28% of the country’s total shipments. After exemptions laid out in Trump's executive order last week, including on aircraft, energy, and orange juice, the tariff that took effect on Wednesday will apply to just under 36% of Brazilian exports to the US by value, according to estimates in Brasilia.