2025–2026 Brazil–United States diplomatic dispute
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The 2025–2026 Brazil–United States diplomatic dispute was a period of increased tensions between the government of Brazil and the government of the United States that occurred between June 2025 and December 2025. The dispute started when US President Donald Trump imposed a 50 percent tariff on Brazilian goods, as well as imposing the Magnitsky law against Brazilian Supreme Court Justice Alexandre de Moraes, the main judge behind the trial of the individuals involved in the January 8 Brasília attacks, and those involved in a coup plot after Jair Bolsonaro lost the 2022 Brazilian presidential election to Luiz Inácio Lula da Silva.[1]
Other measures included revoking the US visas for 8 of the 11 justices of the Brazilian Supreme Court,[2][3][4] officials involved in the program "Mais Médicos" (More Doctors)—a program that brought Cuban doctors to Brazil—including Brazilian Health minister Alexandre Padilha,[5][6] as well as other Brazilian political figures.[7][8][9] The Trump administration also targeted the Pix instant payment system managed by the Brazilian Central Bank, and also investigated accusations of piracy at the Rua 25 de Março (March 25th Street).[10] It also looked into Brazil's role in BRICS.[11]
History
Background
The US has run trade surpluses with Brazil since 2007,[12] reaching $253 million in 2024.[13] Nonetheless, Trump criticized the country for as a "tremendous tariff maker" and pledged tariffs on its exports.[14] Brazilian president Luiz Inácio Lula da Silva vowed to reciprocate.[15] However, following Trump's 25% tariffs on steel and aluminum, Brazilian Institutional Affairs Minister Alexandre Padilha stated that Brazil would not retaliate.[16]
On April 2, 2025, Trump imposed the base 10% tariff on Brazil.[17] Brazilian aircraft manufacturer Embraer voiced worries over rising complexity and costs.[18] Brazilian coffee producers initially were saw an opportunity because of higher tariffs on competitors such as Vietnam, which would make their rivals less competitive.[19][20] In April 2025, the Brazilian National Congress passed a "Trade Reciprocity Law", enabling the government to respond to unilateral trade measures.[21] By May 2025, according to Finance Minister Fernando Haddad, Brazil and the US were negotiating the terms of an understanding on tariffs.[22]
Tariff dispute
In a letter to Brazil on July 9, 2025, Trump threatened a 50% tariff while denouncing charges against Jair Bolsonaro, an ally facing trial for the 2022 Brazilian coup plot.[23] On July 30, Trump declared Brazil’s actions a US "national emergency" and imposed an additional 40% tariff on top of a 10% baseline tariff, for a total tariff rate of 50%.[24] The order exempted several Brazilian exports, notably airplanes, aeronautical components, iron ore, aluminum, natural gas, orange juice, fertilizers, petroleum and lumber. Other main Brazilian exports were not exempted.[25][26]
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Nobelist Paul Krugman criticized the tariff, stating that the tariff was reason enough to impeach the president.[27] Fellow Nobelist Joseph Stiglitz stated that Brazilian president Luiz Inácio Lula da Silva, by refusing to submit to US intimidation, had "defended his country's sovereignty" in trade and in the regulation of American-controlled tech platforms.[28] In the aftermath of the announcement, Brazilians adopted the phrase Trump Always Chickens Out (TACO) to mock the American president; the acronym became one of the seven most-used terms on X that week.[29][30]
In August 2025, China authorized 183 Brazilian companies to export coffee under a five-year agreement, aiming to boost imports amid rising domestic demand. The move followed the US imposition of a 50% coffee tariff covering about 30% of US imports. Prices rose sharply for American roasters. The China market was not expected to fully replace US demand.[31][32]
Faced with the tariffs, Lula attempted to diversify Brazil’s international partnerships and strengthening BRICS.[33] In November 2025, Trump signed Executive Order 14361, "Modifying the Scope of Tariffs on the Government of Brazil", which exempts coffee, beef and certain other agricultural imports from the 40% tariff on imports from Brazil.[34][35] On November 24, 2025, The New York Times published an article stating that "Brazil defied Trump and won",[36] and that, five months after Trump's "furious letter",[37] the American president "had pretty much admitted defeat" when he merely called the arrest of Jair Bolsonaro "a pity".[38][39] The piece also argued that Luiz Inácio Lula da Silva came out of the episode "politically stronger" than when he entered.[40][41]
Pix dispute
In July 2025, the Office of the United States Trade Representative (USTR) launched an investigation focused on electronic payment services, preferential tariffs, and anti-corruption interference by Brazil. It alleged unfair advantaging of Brazilian payment service Pix over US competitors.[42] Lula accused Trump of being "bothered by Pix" because it "will put an end to credit cards". Lula's administration has planned to launch a "massive" media campaign in defense of Pix, with the slogan "O Pix é do Brasil" [The Pix is Brazil's], in an effort to associate the system with national sovereignty.[43]
Members of the Brazilian government accused the investigation of being born of lobbying by U.S. credit card companies and big tech firms.[44] Economist Paul Krugman accused the U.S. of being pressured by the financial sector into the investigation.[45] According to Fundação Getulio Vargas finance professor Fabio Gallo, Pix is inspiring other countries to develop their own solutions, thereby weakening the dollar and threatening the "end of the Western financial monopoly", in which the U.S. is no longer able to track, tax, or block transactions.[46] Opinion polls indicate a 92% approval rating for the payment system among Brazilians. Furthermore, proposed alterations (flexibilização) to the system in response to United States pressure have faced significant opposition. A survey conducted before the imposition of tariffs found that 72% of the population favored maintaining the current system without changes, despite the threat of US tariffs.[47]
On 15 July 2026, following the conclusion of the USTR investigation, the Trump administration imposed 25% tariffs on a range of Brazilian imports.[48]