Trump Threatens 50% Tariffs on Brazil

Summary

WSJ What’s News - Episode: Trump Threatens 50% Tariffs on Brazil

Release Date: July 10, 2025
Host: Luke Vargas
Producer: The Wall Street Journal

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1. Introduction

In today’s episode of WSJ What’s News, host Luke Vargas delves into a series of significant geopolitical and economic developments shaping global markets. The primary focus centers on President Donald Trump’s aggressive tariff strategies, including a substantial 50% tariff threat against Brazil, alongside new tariffs on copper. Additionally, the episode covers the UK and France’s strategic move to extend nuclear protections in Europe, Russia’s continued aggression in Ukraine, and notable corporate developments in the global market.

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2. Trump’s 50% Tariffs on Brazil

President Trump has escalated his tariff campaign by threatening a 50% duty on Brazilian exports, marking the highest reciprocal tariff rate he has proposed to date. This move is unprecedented in Trump’s trade policy, particularly because it targets a political ally.

Key Points:

• Scope and Impact: The tariffs, if implemented next month, could potentially sever the economic relationship between the U.S. and Brazil, America’s 16th largest trading partner. Key exports from Brazil to the U.S. include coffee, machinery, oil, and various chemicals.

• Gavin Bade’s Insights (02:00):

  “At a 50% tariff, it's hard for me to see how really any of those products would be competitive with domestically sourced products or certainly with imports from around the world.”
  — Gavin Bade, WSJ Trade Reporter

• Political Motivations: This is the first instance where Trump has directly linked the tariffs to a political motive, citing legal actions against former Brazilian President Jair Bolsonaro. Bolsonaro, a right-wing leader, is currently on trial for an alleged coup attempt against Brazil’s government.

• Negotiation Tactics: Bade suggests that Trump’s move may be both punitive and a negotiating strategy to exert pressure on Brazil. However, the Brazilian government, under President Luiz Inácio Lula da Silva, is unlikely to relent, given Lula’s stance against U.S. intervention and his alignment with other global powers like China and Russia within the BRICS consortium.

Gavin Bade’s Analysis (03:16):

“We have heard from Lula, the sitting president, who said, we're not going to accept any sort of foreign interference or tutelage...”
— Gavin Bade

• Legal Challenges: The tariffs are slated to face legal scrutiny, especially after a federal trade court previously ruled Trump lacked the authority for broad tariff impositions. Bade points out that without a clear legal foundation, particularly given that the U.S. actually maintains a trade surplus with Brazil, these tariffs may falter in court.

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3. New Copper Tariffs and Market Reactions

Alongside tariffs on Brazil, Trump has announced a 50% levy on copper imports effective August 1. This decision has significantly impacted the commodities market, with copper prices surging and mining stocks rallying.

Key Points:

• Importance of Copper: Copper is essential in various industries, including electronics, construction, and defense. The U.S. consumes about half of its copper production, relying heavily on imports to meet demand.

• Joe Wallace’s Breakdown (06:32):

  “Copper is used in pretty much everything, a lot of electronics, construction, no doubt. It has all sorts of defense applications...”
  — Joe Wallace, WSJ Contributor

• Market Impact: Copper prices have increased by 40% this year, benefiting copper producers like Freeport, McMorran, Glencore, and Rio Tinto. Conversely, U.S. consumers of copper, including electronics and manufacturing firms, face higher costs.

• Global Implications: Reduced U.S. imports may lead to lower copper prices globally, benefiting consumers in Europe, Asia, and the Middle East.

Joe Wallace’s Insights (07:13):

“Anyone producing copper in the US or elsewhere for that matter, is a big beneficiary. We've seen mining stocks... posting some quite significant gains.”
— Joe Wallace

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4. UK and France Extend Nuclear Protection in Europe

In a strategic defense maneuver, the United Kingdom and France have announced coordination in the use of their nuclear weapons to respond to major threats against Europe. This pact aims to provide a robust nuclear deterrent for the continent amidst rising concerns over Russian aggression.

Key Points:

• Defense Strategy: The coordination signifies a move towards greater European self-reliance in defense, potentially reducing dependence on the United States.

• Alistair McDonald’s Commentary (09:20):

  “The message to the U.S. is that, yeah, we're more than capable of standing up for ourselves in the making. And the message to the rest of Europe is that you are now under our nuclear umbrella.”
  — Alistair McDonald, Defense Reporter

• Reassurance to Allies: This move is intended to reassure European allies regarding their security, especially if there are doubts about U.S. commitment.

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5. Continued Russian Aggression in Ukraine

Russia has intensified its assault on Ukraine, targeting Kyiv with a major missile and drone attack overnight, resulting in fires and fatalities. This attack follows a massive offensive the previous day, where Russia deployed 728 drones and decoy munitions against western Ukrainian cities.

Key Points:

• Ukrainian Response: Ukrainian President Volodymyr Zelensky condemned the attacks, asserting that they demonstrate Russia’s unwillingness to seek peace.

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6. U.S. Political Developments

In domestic news, President Trump has appointed Transportation Secretary Sean Duffy as the interim chief of NASA, following the withdrawal of his previous nominee, Jared Isaac Mitten. Trump questioned Mitten’s political donations and associations with Elon Musk, leading to his replacement.

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7. Corporate News: Ferrero Eyes Acquisition of W.K. Kellogg

Ferrero, the renowned Italian confectionery company behind brands like Ferrero Rocher and Nutella, is nearing a $3 billion deal to acquire breakfast cereal giant W.K. Kellogg. This potential acquisition includes popular products such as Froot Loops, Frosted Flakes, and Rice Krispies. This move follows Kellogg’s strategic spin-off of its North American cereal business into a separate entity, Kellanova, which was sold to Mars in a $30 billion deal last year.

Key Points:

• Strategic Expansion: Ferrero’s acquisition would significantly expand its footprint in the breakfast cereal market, complementing its existing product lines.

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8. Conclusion

Today's episode of WSJ What’s News provided an in-depth analysis of President Trump’s aggressive tariff strategies and their far-reaching implications on international trade and global markets. Additionally, strategic defense moves by the UK and France, ongoing conflicts in Ukraine, significant political appointments in the U.S., and major corporate acquisitions highlight the complex interplay between politics, economics, and global security.

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Notable Quotes:

• Gavin Bade (01:51):

  “Most people are of the opinion in the trading community around D.C. certainly on Capitol Hill, that the rest of these letters... are basically looking to up the ante in negotiations.”

• Alistair McDonald (09:20):

  “The message to the U.S. is that, yeah, we're more than capable of standing up for ourselves in the making.”

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For more detailed insights and updates, tune into the next edition of WSJ What’s News.

Transcript

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[Luke Vargas]

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[Luke Vargas]

Citing attacks on a political ally, President Trump threatens Brazil with 50% tariffs. Plus the President sets a date for new copper tariffs as prices of the metal keep on heating up. And wary of US Security guarantees, the UK And France offer to use their nukes to defend Europe.

[Alistair McDonald]

What it says to the U.S. is that, yeah, we're more than capable of standing up for ourselves in the making. The message to the rest of Europe is that, you know, you are now under our nuclear umbrella.

[Luke Vargas]

It's Thursday, July 10th. I'm Luke Vargas for the Wall Street Journal and here is the AM edition of what's news, the top headlines and business stories moving your world. Today, President Trump is breaking new ground in his global tariff blitz by threatening Brazil with a 50% duty on its exports starting next month. That marks the highest reciprocal tariff rate Trump has proposed in letter world leaders this week. And as Journal trade reporter Gavin Bate explained, it marks the first time that Trump has gone to bat for a political ally, saying the tariffs were necessary because of legal action being taken against former Brazilian President Jair Bolsonaro, the leader of the country's political right who's on trial over an alleged coup attempt against the current government.

[Gavin Bade]

Trump in this letter really said that the Brazilian government and the Brazilian courts were treating former President Jair Bolsonaro unfairly and engaging in a politically motivated witch hunt. The extent to which this is a negotiating tactic with the Brazilian government and to the extent this is a punitive move, a penalty for how they're treating Bolsonaro, I think that is the big question here, right? Most people are of the opinion in the trading community around D.C. certainly on Capitol Hill, that the rest of these letters, the letters to other trading partners are basically looking to up the ante in negotiations. They are negotiating tactic, just trying to put extra pressure on countries, particularly a lot of countries where they were close to a deal. This certainly would throw a large wrench into the negotiations. And I don't think that the Brazilian legal system and the legal case against Bolsonaro is something that Lula is going to be especially keen to negotiate away. Obviously, if Trump is just being bellicose and kind of blowing smoke on that, then maybe we see, okay, if he gets enough market access into Brazil, maybe he'll lower the tariff. But that's going to be a much more difficult thing for the Brazilians to negotiate on than even even like protections for their prized industries.

[Luke Vargas]

Should the tariffs on Brazil kick in next month, Gavin said it could potentially decouple America's economic relationship with its 16th largest trading partner, from which the US sources coffee, machinery, oil and a variety of chemicals.

[Gavin Bade]

At a 50% tariff, it's hard for me to see how really any of those products would be competitive with domestically sourced products or certainly with imports from around the world. And so you could be looking at an effective trade embargo across multiple tariff lines if these 50% duties were to actually go into effect. We have heard from Lula, the sitting president, who said, we're not going to accept any sort of foreign interference or tutelage, he said from other nations. And I think you could see Lula reacting to this quite bitterly. He's always been a critic of US Intervention in Latin America and has not been shy to cozy up to other powers. Of course, having a relationship with Russia and China as part of the BRICS consortium. Brazil being the B in the BRICS consortium, he's always had kind of a more global south orientation, certainly than Bolsonaro. And so you could see this kind of missive from Trump and these tariffs really pushing him away from the US Sphere of orbit and perhaps toward China and those other powers.

[Luke Vargas]

And a final element of Trump's Brazil letter was an order to open a so called Section 301 Tariff Investigation into unfair trade practices over Brazil's legal cases and fines on US Tech firms, a move Gavin said could help Trump Trump's broader tariff campaign withstand legal challenge after a federal trade court ruled he lacked the authority to impose sweeping levies on virtually every nation.

[Gavin Bade]

The Trump administration is facing an appeals hearing at the end of this month, one day before the new tariffs are supposed to go into place. And so should the court knock down those tariffs based on the International Emergency Economic Powers Act. You know, Trump could really be see his whole tariff action hollowed out here, and they would have to pivot to another legal authority. That could be very difficult. However, section 301, the stuff that's supposed to strike back the Brazilian digital policies. That seems like it's on much firmer legal footing. The other wrinkle here is that Trump's justification for those IAIPA tariffs, the ones that are at risk, really rests on the argument that persistent trade deficits with major economies are a threat to US national security. Well, it makes it even more difficult in the Brazilian case because we don't have a trade deficit with Brazil. We actually have a trade surplus. We exported more than 7 billion more to Brazil in 2024 than we imported from them. And so the legal underpinning of these tariffs is very, very questionable because the case here does not really fit what they prescribe these tariffs for at all. I imagine that any lawyers for, you know, US Exporters to Brazil are sharpening their knives figuratively tonight because there's a lot of ways to go about slicing these tariffs up in court.

[Luke Vargas]

That was Journal trade reporter Gavin Bade. Meanwhile, another of President Trump's threatened tariffs, a 50% levy on copper to begin on Aug. 1, has sent mining stocks and the price of metal surging this morning. And here to discuss the significance of that is my colleague Joe Wallace. Joe, just quickly, for my benefit here, remind me why copper matters and why Trump is reaching for these tariffs.

[Joe Wallace]

Well, copper is used in pretty much everything, a lot of electronics, construction, no doubt. It has all sorts of defense applications. And the US While producing a lot of copper, imports about half of what it consumes. And so Trump's justification here is that there's national security rationale for making the US Much more self sufficient in copper and cutting down its import dependency. He said on Wednesday when announcing the date for these levies, that he'd received a national security report underlining the importance of copper.

[Luke Vargas]

And of course, as we see, the prospect of those levies has really had a market impact. Who are the potential winners and losers here?

[Joe Wallace]

So the price of copper in the US has really zoomed higher. So anyone consuming copper in the US Be that an electronics company, manufacturing company, they're going to be suffering. Prices are up 40% so far this year. Anyone producing copper in the US or elsewhere for that matter, is a big beneficiary. We've seen mining stocks, Freeport, McMorran in the States, Glencore, Rio Tinto and others elsewhere, really posting some quite significant gains. Elsewhere in the world. Copper prices could decline because there's going to be less of a pull for copper into the US Than there has been so far this year. There's been an enormous amount of front running people importing huge amounts of copper into the States so far this year, but that will come to an end and that should mean there's more copper for the rest of the world to consume. So if you're a copper consumer in Europe or, or in Asia or in the Middle east, you're probably a beneficiary of this.

[Luke Vargas]

Joe, thank you so much. Appreciate you stopping by.

[Joe Wallace]

Thanks, Luke.

[Luke Vargas]

Coming up, we have got the rest of the day's news, including a proposal by the UK And France to extend nuclear protection to their European allies. We've got that story and more after the break.

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[Luke Vargas]

France and the United Kingdom say they will now coordinate the use of their nuclear weapons and respond to any major threat to Europe, together essentially creating a nuclear deterrent for the continent. Defense reporter Alistair McDonald says the announcement is likely to reassure allies who are nervous about Washington's commitment to Europe's security and comes amid increasing concerns over Russian aggression.

[Alistair McDonald]

The British government would argue that we're living in a new world in which Russian aggression has become such that they sort of have to remind the world that they are a nuclear power in their own right and they don't need to rely on the US this is debatable, but in terms of the optics, it's quite significant. The message of what it says to the U.S. is that, yeah, we're more than capable of standing up for ourselves. And the message to the rest of Europe is that you are now under our nuclear umbrella.

[Luke Vargas]

Meanwhile, Russia has hit Ukraine's capital, Kyiv, with another major missile and drone attack overnight, causing fires in the city and killing two people. It comes just a day after the largest assault yet, in which Russia launched 728 drones and decoy munitions at cities western Ukraine. Ukrainian President Volodymyr Zelensky said the attack showed again that Russia has no desire to end the war. Back in Washington, President Trump has tapped Transportation Secretary Sean Duffy to be the interim chief of NASA, which has been without a permanent leader since January. The announcement comes after the president withdrew his nomination of entrepreneur Jared Isaac Mitten to become the agency's leader back in May. In social media posts over the weekend, Trump questioned Isaac Mitten's past political political donations to Democrats and his ties to Elon Musk. And we are exclusively reporting that Ferrero, the Italian candy maker behind Ferrero Rocher and Nutella, is nearing a roughly $3 billion deal to buy breakfast cereal giant W.K. kellogg. Barring any last minute snags and talks, W.K. kellogg is the company behind Froot Loops, Frosted Flakes and Rice Krispies and the product of Kellogg spinning off its North American cereal business into a separate publicly traded company about two years ago. The remaining global snacking business, Kellanova, agreed to sell itself to Mars in a more than $30 billion blockbuster transaction last year. And that's it for what's news for this Thursday morning. Today's show was produced by Kate Bullivant and Daniel Bachelor. Our supervising producer was Sandra Kilhoff. And I'm Luke Vargas for the Wall Street Journal. We will be back tonight with a new show. Until then, thanks for listening.