In the recent flurry of letters sent to different countries setting new tariff rates, President Trump has raised eyebrows for several reasons. The President’s letter to Brazil has gained the most attention in this latest round, stating he will impose a 50% tariff starting on August 1 on all goods exported from Brazil to the United States. Not only did this letter indicate an “unfair” trade relationship, it also included the issues of “insidious attacks on free elections, and the fundamental free speech rights of Americans.” This plan leaves several unanswered questions.
On April 2, the Trump Administration released a chart that outlined the “Tariffs Charged to the U.S.A., including Currency Manipulation and Trade Barriers.” The stated rate that the Administration identified for the country of Brazil sat at 10%, indicating one of the lowest rates identified for reciprocal tariffs. The question remains; how did the “unfair” trade relationship jump from 10% to 50% (or higher) in the span of three months? As one of the few countries that the United States continually maintains a trade surplus with, this leaves one to question the economic need for these tariffs.
Therefore, people must explore the other claims made in this letter. In the President’s reference to “insidious attacks on free elections,” he identifies the prosecution of former Brazilian president, Jair Bolsonaro, as a political “witch hunt” that is an “international disgrace.” Regardless of what an individual thinks about the merits of the case, two questions arise. First, are tariffs the right tool to try and effect political change in another country? Typically, the tool of choice for this type of action (not usually leveraged against fellow democracies) is sanctions of various sorts. Second, why should the American consumer have to pay more for imports from Brazil, like coffee, to interject the Administration’s preferences into the Brazilian judicial system? Every American who drinks coffee must answer this question for themselves, especially those who enjoy their daily cup of Dunkin Donuts iced coffee.
The letter also references the attacks on American’s free speech rights, which most in the United States certainly would have concerns about. Here, it appears the President takes issue with recent decisions in Brazil to hold social media companies liable for user generated content hosted on their sites. (Note: President Trump’s Truth Social platform and Elon Musk’s X are suing the Brazilian government over these changes.) With the stated effort of limiting harmful content online, the Brazilian government has mandated that social media companies must remove posts that fit categories outlined in legal and judicial rulings. Due to its refusal to comply with government mandates around removing certain accounts, X was banned in the country last year. Again, Americans must ask themselves how much extra they are willing to pay at the grocery store to spare social media companies from having to more actively moderate content that appears in Brazil? The decision to limit posts in the United States would remain with the social media companies, as Brazilian law has no force within the U.S.
While the continually shifting nature of the Trump Tariffs has created uncertainty in the markets, one thing remains clear. Despite claims that the tariffs are simply designed to reign in trade imbalances, the Administration remains interested in utilizing this economic tool for a variety of reasons. From political preferences, to illegal goods, immigration, reducing Chinese influence, and more, the Administration believes they can flex the United States' economic muscle to reshape the world. While this instinct is not new, the utilization of tariffs in this way has been relegated to the dust bin for the past 90 years. For any non-economic (and many economic) goals that the Administration pursues in this way, the average American must ask themselves; How much am I willing to pay?
By: Tim Horgan, WACNH Executive Director
