The United States has imposed sweeping 50% tariffs on Brazilian exports following an executive order signed by President Donald Trump on July 30, escalating a diplomatic crisis over Brazil's prosecution of former far-right president Jair Bolsonaro, a close ideological ally of the US president.

The measures, which follow through on threats issued earlier this month and take effect on August 6, represent some of the steepest levies imposed by Washington in its global trade disputes. They coincide with fresh US sanctions against Brazilian Supreme Court Justice Alexandre de Moraes, who is overseeing Bolsonaro's criminal trial on coup plotting charges.

Trump's administration has framed the tariffs as a response to what it considers judicial overreach in Brazil. The White House accused Brazilian authorities of conducting "politically motivated persecution" that undermines democratic principles and the rule of law.

Treasury Secretary Scott Bessent directly criticised Justice Moraes, stating: "Alexandre de Moraes has taken it upon himself to be judge and jury in an unlawful witch hunt against US and Brazilian citizens and companies." He further alleged that Moraes "is responsible for an oppressive campaign of censorship, arbitrary detentions that violate human rights, and politicised prosecutions."

The diplomatic row intensified after Moraes recently imposed new restrictions on Bolsonaro, including requirements to wear monitoring devices and cease contact with foreign officials, amid allegations the former president sought Trump's intervention in his legal proceedings.

Despite the broad tariff announcement, the final order contained numerous carve-outs that spared key Brazilian export sectors. Aircraft, energy products, orange juice, wood pulp, certain metals and fertilisers were exempted from the full levy, providing significant relief to major exporters and their US customers.

These exclusions suggest successful lobbying by affected American businesses rather than any softening of Trump's political stance, analysts noted. According to Reuters, the exemptions particularly benefited Embraer, the world’s third-largest aircraft manufacturer, which confirmed that existing 10% duties would remain whilst avoiding the additional 40% increase.

Brazilian Treasury Secretary Rogério Ceron acknowledged the silver lining, telling reporters: "We're not facing the worst-case scenario."

Oil trade between the countries is expected to resume after petroleum products secured exemptions, whilst mining representatives said three-quarters of their exports would avoid the higher duties, Reuters reported.

Yet several major Brazilian export categories remain exposed to the full tariff burden. Coffee and beef, two significant export earners, will face the 50% levy. Industry groups representing meat producers warned of potential $1bn losses over the coming months.

Investment bank Goldman Sachs calculated that the effective tariff rate across all Brazilian shipments would average 30.8% - lower than initially feared due to the exemptions but still substantial.

The Brazilian government slammed the US measures as "unacceptable" and "unjustifiable," with Lula hinting that retaliation was possible whilst expressing willingness to negotiate. However, Trump's order warned that any Brazilian retaliation would only prompt the US to "up the ante."

In a defiant interview with the New York Times published two days before the August 1 deadline, Lula emphasised Brazil's determination to negotiate as an equal partner rather than subordinate to Washington. "At no point will Brazil negotiate as if it were a small country against a large country. Brazil will negotiate as a sovereign country," he declared.

The Brazilian leader criticised Trump's conflation of political and commercial disputes, arguing that trade negotiations should remain separate from judicial matters. "If he wants to have a political fight, then let's treat it as a political fight. If he wants to talk about trade, let's sit down and discuss trade. But you can't mix everything up," he said.

Lula revealed that Brazilian officials had attempted to engage their American counterparts through multiple channels, including ten meetings with the US Department of Commerce and a formal letter sent in May requesting dialogue. "The response we received was through President Trump's website announcing tariffs on Brazil," he noted, adding that the tone suggested Washington had no interest in meaningful discussions.

Lula also rejected any pressure to align with US positions on China, stating that Brazil would not participate in a "cold war" between the superpowers. "We have an extraordinary trade relationship with China. If the US and China want a cold war, we will not accept it. I am interested in selling to whoever wants to buy from me, whoever pays more.”

The sanctions against Justice Moraes, implemented under America's Global Magnitsky Act, freeze any US-held assets and bar American citizens from business dealings with the judge. These penalties followed earlier visa restrictions imposed on Moraes and his family.

Bolsonaro faces charges of plotting to prevent Lula from taking office following Brazil's 2022 presidential election. Prosecutors allege he conspired to detain or assassinate political rivals, including Lula and Moraes himself.

Meanwhile, Brazilian economists warned that the deteriorating trade environment highlights the urgent need for domestic reforms. "Brazil needs, more than ever, a productivity shock that will bring competitiveness gains to industry, services, and even agriculture," Sandra Rios, director of the Centre for Integration and Development Studies, told Estadao.

The measures are yet another sign of Trump's willingness to use aggressive trade policies as a tool for political objectives, marking a stark departure from traditional multilateral trade rules. Analysts suggested this creates significant uncertainty for global commerce, with "multilateral rules being ignored" in favour of "trade management" rather than liberalisation, as argued by Rios.

Brazil runs one of the few trade surpluses with the US among major economies, making Trump's decision to target the country with tariffs unusual from a traditional trade perspective. Despite the president’s claims of “trade imbalances” with Brazil, the US had a $6.8bn trade surplus last year with the South American nation, according to US Census Bureau data.