The Washington Post reports:

Since returning to the White House, President Donald Trump has used trade as a cudgel to exert concessions from smaller nations. But Brazil, his newest tariff target, is a much more formidable adversary, analysts said, and is less likely to bend to pressure from Washington.

Latin America’s largest nation has a relatively closed economy, more insulated than many of its peers from fluctuations in global trade. China, not the United States, is now Brazil’s leading trade partner, limiting Washington’s economic leverage.

And in Brazilian President Luiz Inácio Lula da Silva, who lost a finger working in a factory and rose to prominence battling the country’s military dictatorship, Trump has picked a fight with a leader who has long relished a political brawl.

In interviews with The Washington Post, aides to Lula said the government believes it can withstand a 50 percent tariff on Brazilian goods, which Trump announced Wednesday would go into effect on Aug. 1. In his letter addressed to Lula, Trump said the move was “due in part” to the prosecution of former president Jair Bolsonaro, a far-right ally of the American president, on charges of plotting to retain power through military force following his 2022 electoral loss.

“There could be impacts that could slow our growth a little bit,” said one senior official in the Foreign Ministry, speaking on the condition of anonymity to candidly discuss the government’s thinking. “But from an economic point of view, Brazil doesn’t have a strong economic dependency on the United States.”

The United States is seen here as an important trading partner — purchasing $40 billion worth of goods in 2024 — but not a crucial one. Exports to the U.S., according to a recent Moody’s report, account for only 1.7 percent of Brazil’s economic output. [Continue reading…]