Holding the Trump Card: Brazil’s Lula Is Capitalizing on Tariff War
NEED TO KNOW
Holding the Trump Card: Brazil’s Lula Is Capitalizing on Tariff War
BRAZIL
Over July 6-7, Brazil hosted the BRICS summit, an annual gathering of a growing group of major emerging economies increasingly dominated by China and Russia, which are leading a challenge to the US-led Western world order.
At the time, commentators said that the president of Brazil, Luiz Inácio Lula da Silva, known as Lula, was unpopular at home, as evidenced by the sharp drop in his administration’s approval ratings to 28 percent, and losing “clout” abroad due to his clumsy handling of foreign policy.
“Brazil’s role at the heart of an expanded and more authoritarian-dominated BRICS is part of Lula’s increasingly incoherent foreign policy,” wrote the Economist. “He has made no effort to forge ties with the United States since Donald Trump took office in January.”
Instead, it added, Lula courts China, Russia, and Venezuela while defending Iran.
Enter US President Donald Trump.
On July 9, irked by the BRICS meeting and other issues, Trump threatened Brazil with 50 percent tariffs on its exports to the US – despite the US having a roughly $6 billion trade surplus with the country. He said it was because of the “witch hunt” against former right-wing President Jair Bolsonaro, who is being tried for plotting a coup in the aftermath of the 2022 election that he lost to Lula. Bolsonaro is also accused of plotting to kill both Lula and Supreme Federal Court Justice Alexandre de Moraes. Bolsonaro denies all charges.
Soon after, the US began investigating Brazil’s trade practices and revoked the visas of top officials, such as Supreme Court justices, prosecutors, and others linked to Bolsonaro’s prosecution, and announced that it was considering sanctions on these individuals. It has especially singled out de Moraes for his actions against US tech companies in his fight against disinformation, which US Secretary of State Marco Rubio called a “persecution and censorship complex” that not only “violates basic rights of Brazilians, but also extends beyond Brazil’s shores to target Americans.”
Lula fought back.
He promised to reciprocate on tariffs, saying that any tariff increase by the US would trigger Brazil’s economic reciprocity law. That legislation allows Brazil to suspend bilateral trade, investment, and intellectual property agreements with countries that harm the South American nation’s competitiveness, the Associated Press explained. Lula has also threatened to tax US tech companies, such as Meta.
“Doesn’t anyone on (Trump’s) team have the sense to explain to him not to insult another country like that?” Lula fumed, calling the US action “unacceptable blackmail.” “It is unacceptable for foreign interests to override Brazilian sovereignty.”
Just a month later, the spat has left the Brazilian president riding high at home and abroad, say analysts.
Part of the reason is that Lula is the only leader of a US trade partner to challenge Trump’s new tariff regime despite the consequences. Now, Brazil has become the center of attention worldwide.
“The world is watching as Brazil reacts to the US,” wrote Andre Pagliarini of the Louisiana State University in the London School of Economics’ Business Review. “What happens in Brazil going forward is of profound interest to other large economies in the Western Hemisphere, like Mexico and Canada and beyond.”
“(Lula) is pushing back hard on the Trumpian notion that the price of market access is the dismantling of democratic norms,” Pagliarini added. “Lula’s overarching strategy is focused on highlighting the irrationality and essential hostility of Trump’s attack… The stakes should be clear for everyone.”
Brazil is not alone in being singled out by the US for higher tariffs in response to non-economic policies. For example, Canada’s decision to recognize Palestine led Trump to warn that it would now be “very hard” for America to reach a new trade deal that would allow its northern neighbor to avoid high tariffs.
Still, the stakes are higher in Brazil because the US is pressuring the country to subvert its own democratic institutions, analysts say. However, the US pressure has backfired spectacularly.
Instead of being cowed, the Brazilian high court has stepped up its action against Bolsonaro, who has also taken pains to distance himself from the US action on his behalf. It ordered the former president to don an electronic ankle monitor, confined him to house arrest at certain times, and forbade him from using social media or talking to foreign officials.
It has also seized the assets of his son, lawmaker Eduardo Bolsonaro, who moved to Texas and has been lobbying US officials to get tough on Lula. Meanwhile, Bolsonaro’s allies in Brazil’s right-wing legislature have closed ranks to consider tariffs and other actions against the US.
On the streets, Brazilians have rallied, too, protesting US actions and burning effigies of Trump.
Lula’s approval ratings have doubled within a month, polls show, and he is now the leading contender in the presidential elections next year. Some say the 2026 vote may echo election outcomes in Canada and Australia earlier this year: Both saw trailing center-left parties come from behind to easily beat Trump-linked conservatives.
Moreover, though the tariffs may lower growth slightly in Brazil, its exports to the US only account for about 13 percent of its total exports, while its exports to China are more than double that. Analysts say that will allow Lula to benefit politically, as he will be able to blame Trump and the American president’s allies in the Brazilian right for any economic pain, which in any case will likely fall more heavily on regions that vote conservative.
These days, Lula often speaks to Brazilians about the tariffs while wearing a hat that reads, “Brazil belongs to Brazilians.” He also talks often about how sacred Brazil’s democratic institutions are to a society that suffered under their Portuguese rulers and later under multiple dictatorships.
“Trump has inadvertently made Lula into a bulwark against neocolonialism,” wrote Foreign Policy, “a role the aging firebrand will be more than happy to play.”
THE WORLD, BRIEFLY
Chinese Leader Makes Rare Visit to Tibet Preaching Unity
CHINA / TIBET
Chinese President Xi Jinping made his second-ever visit to Tibet this week, urging unity during the 60th anniversary of its establishment as an autonomous region after China annexed the territory, the BBC reported.
State media reported Xi was met by about 20,000 officials and local people in the regional capital of Lhasa, where he told senior Tibet officials that governing the region means maintaining political and social stability, ethnic unity, and religious harmony.
Xi praised the local government of the tightly controlled region for “engaging in a thorough struggle against separatism,” referring to the decades-old Tibetan resistance to China’s control.
China’s ruling Communist Party established the Tibet Autonomous Region in 1965, six years after the 14th Dalai Lama fled into exile in India following a failed uprising against China since its takeover in 1951, Reuters noted.
Beijing billed the establishment of Tibet as an autonomous region as an effort to give the Tibetans a greater say over local affairs. While international human rights groups and exiles often denounce China’s rule in Tibet as “oppressive,” China denies those allegations.
During his visit, Xi urged greater economic, cultural, and personnel exchanges to and from Tibet, along with the promotion of a common national language and writing system.
He called for stronger regulation of “religious affairs” and a need to “guide Tibetan Buddhism to adapt to socialist society” but did not mention the exiled Dalai Lama.
Xi’s visit comes just two months after the 90-year-old Dalai Lama announced that his office will pick his successor, a right that China contends belongs to officials inside Tibet, according to Al Jazeera.
Rather than seeking independence, the Dalai Lama always pushed for a “middle way” approach, calling for genuine self-rule for Tibet within China. Beijing, however, considers him a separatist.
This visit also comes a month after China began construction on what is set to become the world’s biggest dam on the Yarlung Tsangpo River, which flows through the Tibetan plateau.
China said the project will focus on ecological protection while promoting the local economy. Experts, however, warned that the new dam could give China the ability to control or divert the Yarlung Tsangpo, which flows into India and continues into Bangladesh’s rivers.
Tibet’s shared border with India makes it a strategic region for China, and Xi’s visit coincided with a rare visit to India by China’s Foreign Minister Wang Yi. At that meeting, Beijing and New Delhi pledged to repair relations strained by a deadly 2020 border clash.
Washington Imposes New Sanctions On ICC Officials
WORLD
The International Criminal Court (ICC) this week criticized the United States’ decision to impose sanctions on its judges and deputy prosecutors, escalating a confrontation over the tribunal’s efforts to prosecute Israeli leaders and US military personnel, the BBC reported.
On Wednesday, the US State Department announced sanctions against Judge Nicolas Guillou of France and Judge Kimberly Prost of Canada, as well as deputy prosecutors Nazhat Shameem Khan of Fiji and Mame Mandiaye Niang of Senegal.
The sanctions freeze any US assets the officials may hold and bar them from the American financial system.
In a statement announcing the sanctions, US Secretary of State Marco Rubio accused the court of judicial overreach and called the ICC “a national security threat” and “an instrument of lawfare” against the US and Israel.
The decision follows a series of rulings by the Dutch-based court that have directly targeted US and Israeli figures.
Guillou presided over a pre-trial panel that issued arrest warrants for Israeli Prime Minister Benjamin Netanyahu, former defense minister Yoav Gallant, and late Hamas leader Ibrahim al-Masri in November 2024 for alleged war crimes and crimes against humanity related to the conflict in Gaza.
Prosecutors Khan and Niang were accused of “illegitimate actions against Israel,” while Prost was sanctioned for a 2020 appeals chamber decision authorizing investigations into possible crimes by US personnel in Afghanistan, according to Reuters.
The ICC called the sanctions “a flagrant attack” on its independence, saying the US move undermines the rules-based international order and the pursuit of justice for victims of atrocities. France’s foreign ministry also expressed “dismay” at the targeting of Guillou, and United Nations officials warned that the sanctions “impose severe impediments” on the functioning of the court.
In contrast, Netanyahu welcomed the sanctions as a “firm measure against the mendacious smear campaign” directed at Israel.
The move was the second round of US sanctions against the court in recent months, following restrictions on ICC chief prosecutor Karim Khan and four judges earlier this year.
Established in 2002, the ICC has jurisdiction to prosecute war crimes, crimes against humanity, and genocide in its 125 member states or when cases are referred to it by the UN Security Council.
However, major powers, including the US, Israel, China, and Russia, do not recognize the court’s authority.
Denmark Scraps VAT on Books to Tackle Literacy Crisis
DENMARK
Denmark aims to scrap a sales tax on books in an effort to get more people reading, after data showed that many young people struggle to understand a simple text, Euronews reported.
The Danish Value Added Tax (VAT) on books is 25 percent, which makes it one of the highest in the world.
Culture Minister Jakob Engel-Schmidt said Wednesday that the government plans to propose eliminating the tax on books in its upcoming budget bill, as it believes the high tax could be contributing to a growing “reading crisis,” the Guardian wrote.
Denmark, which has a population of just over 6 million people, recorded sales of 8.3 million books in shops and online in 2023, according to the national statistics office.
Meanwhile, a 2023 survey from the Organisation for Economic Co-operation and Development (OECD) showed that one in four Danish 15-year-olds struggle to understand a simple text, which Engel-Schmidt said is “pretty shocking.” Other studies show teenagers’ reading levels are falling, which experts link to shorter attention spans and constant digital distractions.
Scrapping the tax is expected to cost Denmark more than $50 million a year.
“I am incredibly proud,” Engel-Schmidt told the Ritzau news agency. “It is not every day that one succeeds in convincing colleagues that such massive money should be spent on investing in the consumption and culture of the Danes.”
The minister said he will monitor book prices after the proposed VAT cut to see if prices fall, warning that if the tax only boosts publishers’ profits, they will reconsider whether the policy is effective.
While other Northern countries generally apply a 25 percent VAT on goods, books are often taxed at lower rates. Books are taxed at 14 percent in Finland and 6 percent in Sweden, while in Norway they are tax-exempt.
Sweden reduced its VAT on books in 2001, which resulted in more sales. However, an analysis revealed that those books were mostly bought by existing readers.
DISCOVERIES
Perfect Dinner Guests
As any good guest knows, it’s rude to show up at a dinner party empty-handed.
Ancient humans appeared to follow this custom, too.
About 11,000 years ago, early Neolithic humans hosted a dinner party in what is now the Zagros Mountains of Iran.
Previous evidence of this prehistoric feast came from the discovery of 19 wild boar (Sus scrofa) skulls unearthed at the archaeological site of Asiab in western Iran.
The remains were carefully arranged and sealed in a pit within a round structure. Knife marks on the skulls indicated that the boars were used for feasting – researchers think the meat might have been enough to feed 350 to 1,200 adults, Cosmos Magazine explained.
“These people were clearly the ultimate dinner party guests,” Petra Vaiglova, lead study author of new research on the remains, said in a statement.
Until now, however, archeologists didn’t know where the boars came from.
The new study analyzed microscopic growth patterns and chemical signatures inside the tooth enamel – the hard, outer layer of the tooth that protects its interior – from five of the boar skulls.
Rainfall and bedrock have distinct geochemical values depending on the geographical location, and these isotopic values are absorbed into animal tissues through their water and food.
Researchers noted that the varying values found in the five teeth suggest the boars likely didn’t all come from the same area, and some might have originated as far as 45 miles from the site of the feast.
“What is special about the feast at Asiab is not only its early date and that it brought together people from multiple geographically dispersed settlements,” said Vaiglova, “but also the fact that people who participated in this feast invested substantial amounts of effort to ensure that their contributions involved an element of geographic symbolism.”
Archeologists were surprised that the hunters went to such great lengths: They hunted the boars, uncommon prey at the time, in their region and then transported them across mountainous terrain on a journey that likely took several days to share them at the feast.
“Boars are especially aggressive, and so displaying them as hunting trophies or presenting them at a feast carries with it a certain element of significance beyond their culinary value,” said Vaiglova. “This was clearly a very meaningful event, and the fact that people put in so much effort to transport the boars over such challenging terrain provides us with a glimpse of how old the tradition of bringing geographically meaningful gifts to social events really is.”