Updated by Faith Barbara N Ruhinda at 0800 EAT on Friday 1 August 2025

Brazil initially appeared to have escaped major impact from Washington’s latest trade moves, facing only a modest 10% U.S. tariff. But that changed this week when former President Donald Trump raised the tariff on Latin America’s largest economy to 50%.

Unlike with other countries, the move appears to be driven less by trade policy and more by politics. Earlier in July, Trump falsely claimed that the U.S. had a trade deficit with Brazil—when in fact it maintains a multimillion-dollar surplus.

Trump has framed the steep tariff hike as retaliation for the ongoing trial of his ally, former Brazilian president Jair Bolsonaro. Bolsonaro faces charges related to an alleged coup attempt following his defeat in the last election, during which his supporters stormed government buildings. Prosecutors say the case includes evidence of a plot to assassinate current President Luiz Inácio Lula da Silva.

Bolsonaro has denied the charges, while Trump has dismissed the prosecution as a “witch hunt.”

The White House also cited broader concerns, accusing Brazil of “actions harming U.S. companies” and infringing on the “free speech rights of U.S. persons.”

35% U.S. tariff on Canadian goods had officially taken effect. However, the impact is expected to be limited, as most Canadian exports will be shielded by the United States-Mexico-Canada Agreement (USMCA), the trilateral trade deal currently in force.

According to the Royal Bank of Canada, nearly 90% of Canadian goods entering the U.S. are exempt under the agreement. These include key exports such as fresh produce, energy products, and many industrial goods.

Still, some sectors could be affected. Products like dairy, wood, and leather may face tariffs depending on how ongoing trade discussions unfold.

The USMCA, negotiated during Trump’s first term in office, is scheduled for review next year—a process that could further shape the future of North American trade.

Taiwanese President Lai Ching-te says the United States remains open to further negotiations, after Washington imposed a 20% tariff on Taiwanese goods—higher than the 15% rate applied to key competitors Japan and South Korea.

Lai described the outcome as a “phased achievement” following four rounds of in-person talks and multiple virtual meetings with U.S. officials. Initial proposals had suggested tariffs as high as 32%.

However, the details surrounding semiconductors—Taiwan’s most critical export—remain unclear. In contrast, the European Union secured a 15% tariff rate specifically for chips.

Former President Donald Trump has previously accused Taiwan of “stealing” America’s chip business, and the ongoing uncertainty is likely to unsettle global semiconductor manufacturers.

Taiwan’s stock market reacted sharply to the announcement, plunging over 300 points before rebounding to close with a loss of just under 100 points—an outcome analysts said reflected greater resilience than anticipated.

Taiwan is currently the sixth-largest contributor to the U.S. trade deficit, which totaled nearly $78 billion last year.

A U.S. official has clarified that the tariffs announced on Thursday are not cumulative. This means Brazil will not face an additional 10% on top of the existing 10% blanket tariff already applied to all countries.

Instead, the 10% tariff is part of a separate penalty—following a 40% tariff announced the previous day—bringing Brazil’s total tariff burden to 50% on most goods, according to the official.

With this, Brazil now faces one of the highest U.S. tariff rates in the world, potentially setting the stage for a serious trade confrontation.

Former President Donald Trump has linked the tariffs to political tensions, calling them retaliation for the ongoing prosecution of his ally, former Brazilian president Jair Bolsonaro. On Wednesday, Trump also imposed sanctions on the judge overseeing Bolsonaro’s corruption case.

Critics had long questioned the Trump administration’s willingness to follow through on its tariff threats—some even mockingly referring to it as “TACO,” an acronym for Trump Always Chickens Out.

But that perception may be changing. “There was some confusion before, but I would argue that if you didn’t get the memo in the first six months of chaos, today you can put that to rest. [Trump] is on a mission to reorganise trade,” said Dr. Deborah Elms of the Hinrich Foundation, a trade research institute.

According to Dr. Elms, Trump is demonstrating that he alone controls trade decisions and is willing to take unpredictable, aggressive action to achieve his goals. She pointed to Switzerland as an example: despite believing it had negotiated a more favorable deal with Washington, it was hit with a 39% tariff—a move she described as evidence of Trump’s “individualised policymaking.”

The 35% tariff on Canadian goods has officially taken effect, with the August 1 deadline to reach a deal with Washington now passed.

For more than 70 other countries, however, the new tariff rates will not come into force immediately. Under former President Trump’s latest executive order, those rates are scheduled to take effect on August 7.

Goods loaded onto ships by that date—and already in transit—will be exempt from the new tariffs, provided they arrive in the United States before October 5.

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