Trump Hits Brazil with 50% 'Tariff Bomb'... EU and India Not Yet

Additional Counter-Tariff Letters to 8 Countries

U.S. President Donald Trump sent and published letters on the 9th (local time) specifying counter-tariff rates to be applied beginning August 1st to eight countries, including Brazil and the Philippines. Brazil was hit with a 50% 'tariff bomb', while major trade partners European Union and India have not yet had their letters released.

On this day, President Trump posted a total of eight letters on Truth Social. The specified counter-tariff rates were 20% for the Philippines, 25% each for Brunei and Moldova, 30% each for Algeria, Iraq, Libya, and Sri Lanka, and 50% for Brazil.

Compared to the counter-tariff rates announced on April 2, the Philippines saw a rise of 3 percentage points from 17% to 20%. Brunei increased by 1 point to 25% from 24%. Sri Lanka was adjusted downward by 14 points (44%→30%), Iraq by 9 points (39→30%), Libya by 1 point (31%→30%), and Moldova by 6 points (31%→25%).

There was no change for Algeria.

The main focus was on the counter-tariff rate imposed on Brazil. In April, only a basic 10% tariff was applied, but this time the rate was raised by 40 percentage points at once, citing political reasons.

In a letter to President Luiz Inácio Lula da Silva of Brazil, President Trump wrote, "The fact that former President Jair Bolsonaro is under trial is an international disgrace," and "This trial must not be held. The witch hunt must end immediately."

He went on to argue that "free elections in Brazil and the fundamental freedom of expression for Americans are under attack," emphasizing that a 50% tariff will be imposed on all Brazilian goods entering the U.S. starting August 1.

Additionally, President Trump cited Brazil's tariff and non-tariff barriers as background for the high tariffs. He also mentioned "Brazil's continued attacks on the digital trade activities of American companies and other unfair trade practices," stating that he has ordered Jamieson Greer, United States Trade Representative (USTR), to immediately launch an investigation into Brazil based on Trade Act Section 301.

During his first term, President Trump maintained good relations with the hardline conservative former President Bolsonaro. By supporting him, Trump aimed to corner the progressive President Lula, using U.S. tariffs as a tool for intervention in other countries' politics and judicial affairs.

Initially, President Trump planned to impose the counter-tariffs starting from the 9th after a 90-day grace period, but adjusted them to take effect from the 1st of the following month. Since the 7th, newly adjusted counter-tariff rates have been sent to the leaders of each country.

Among major U.S. trading partners, as of 5 p.m. on the 9th, letters to the European Union (EU) and India had not yet been released. The counter-tariff rates for South Korea and Japan were set at 25% and sent, which is seen as granting additional time for further trade negotiations.

It was reported that Scott Bessent, U.S. Treasury Secretary involved in the tariff negotiations, suggested President Trump postpone the implementation of the counter-tariffs to the following month. This was apparently because progress was being made in negotiations with some major trade partners such as India and the EU.

Jin Young-gi, Hankyung.com reporter young71@hankyung.com