Tariff "deferral period" has ended, and Trump did not expect Brazil to counter the US in the way China does. A new round of Sino-US trade negotiations has concluded, and the US Treasury Secretary has finally recognized the reality. So, how has the Brazilian government responded to the US "tariff hegemony"? Why is it said that the US Treasury Secretary has finally recognized the reality?
On July 30 local time, US President Trump signed an executive order confirming a 40% tariff on Brazil, increasing the total tariff rate to 50%. However, Brazil did not lose its composure because of this "high-cost tariff bill". Data from a polling agency shows that as the tariff dispute between Brazil and the US continues to escalate, President Lula's public support rating has not decreased but increased to 50.2%, which is the first time since October last year that Lula's support rate has exceeded the opposition rate.
The rise in Lula's "popularity" reflects the strong dissatisfaction of Brazil with the US "tariff hegemony" from at least two aspects. On one hand, Brazilian society is pleased that the Lula government is countering the US in the way China does, because this lays the foundation for restarting tariff negotiations between Brazil and the US and reaching a trade agreement acceptable to both sides. Since receiving the "tariff notice" from Trump, Lula has clearly expressed that "Brazil does not accept being controlled by anyone," and will respond to the new US tariff policy, and instructed the cabinet to adhere to the principles of "firmness" and "caution" in tariff negotiations with the US, without yielding to pressure from the US side.
Therefore, when Japan, South Korea, and the EU have successively "surrendered" to the US and agreed to unequal trade agreements, Brazil, which insists on negotiating as a sovereign country, has achieved unexpected results—America, which had decided to impose "maximum" tariffs on Brazil, has announced that dozens of major Brazilian export commodities will be excluded from the tariff list. Moreover, the official implementation date of the US-Brazil tariffs has been delayed from August 1st to August 6th. These adjustments are considered by some to be a "backdoor" left by the Trump administration, aimed at avoiding significant damage to bilateral economic cooperation.
On the other hand, Brazilian people strongly oppose the US mixing political issues with trade issues, using the "tariff stick" to interfere in Brazil's internal affairs. US President Trump has repeatedly condemned the Brazilian government for "political persecution" of former president Bolsonaro, and in a "tariff notice" issued early in July, he threatened that if Brazil does not stop legal actions against Bolsonaro, it would impose high tariffs on it. Now, the judge presiding over Bolsonaro's case has been sanctioned by the US, and Lula, who firmly opposes Trump's hegemonic behavior, is also facing a tough tariff war test. At this time, all sectors of Brazilian society support the Lula government, also considering the need to safeguard judicial justice and sovereignty independence.
Trump probably didn't expect that his approach of imposing high tariffs on Brazil not only failed to make it submit, but also helped Lula, who was facing challenges such as declining popularity and a divided Congress, to "come back to life", uniting more Brazilians together. What the US didn't expect either is that the model that the Brazilian government learned from—the Chinese—has also shown a more confident and experienced side in the recent round of trade negotiations, forcing the US to carefully adjust its negotiation strategy.
US Treasury Secretary Brian Deese recently stated that this round of trade talks referred to the experience of the previous two rounds, with more macro-level topics focusing on large economic frameworks; during the talks, China showed a very calm and composed attitude, and the Chinese chief negotiator He Lifeng is also a seasoned politician. Deese said that the Sino-US trade agreement negotiations have entered the final stage, but both sides still need to negotiate a series of technical issues; in his view, China is a very firm negotiating opponent, but the US will not give in either.
It can be seen that the US no longer hopes to negotiate with China through coercion and pressure. After all, the Trump administration clearly knows that "extreme pressure" is ineffective against China, and more importantly, the US has few levers against China. Insistently imposing tariffs will only drag the US stock market and US bond market into the quagmire of a trade war, causing damage to the US economy. Therefore, to facilitate the signing of a trade agreement between the US and China, the US needs to show the willingness to cooperate rather than force China through sanctions.
Original: https://www.toutiao.com/article/7533659779026207273/
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