The S&P 500 (SPX) is holding strong and is only slightly in the red after Brazilian President Luiz Inácio Lula da Silva promised retaliation against President Trump’s 50% tariff on the country’s goods. The U.S. is Brazil’s second-largest trading partner behind China.
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Trump cited Brazil’s “Witch Hunt” of former Brazilian President Jair Bolsonaro as one of the reasons for the steep tariff. He also pointed to Brazil’s unfair election process and censorship of U.S. social media companies.
“Therefore, any unilateral tariff increases will be addressed in accordance with Brazil’s Economic Reciprocity Law,” said Lula in an X post.
Does the U.S. Have a Trade Deficit with Brazil?
Lula added that Brazil only censors unethical content, such as racism, scams, and hate speech. He also rejected Trump’s claims that Brazil runs a goods deficit with the U.S., citing U.S. government data that showed a U.S.-Brazil trade surplus of $410 billion over the past 15 years.
The U.S.-Brazil goods surplus was $7.4 billion in 2024, according to the Office of the U.S. Trade Representative, countering Trump’s claims of “unsustainable Trade Deficits against the United States.”
The S&P 500 is down by 0.04% at the time of writing.
