Current president Lula da Silva said Thursday that he would impose retaliatory tariffs on the United States if President Trump follows through on a pledge to boost import taxes by 50% on August 1st. Bolsonaro's trial is based on charges he attempted to interfere with the 2022 election, won by da Silva, though, just as in the U.S. during the 2020 elections, many observers considered the result rigged, as Bolsonaro had been leading da Silva in most polls.
Whatever the truth behind election irregularities over the past decade happens to be, Trump's use of tariffs to "punish" Brazil make little sense from an economic perspective.
First, the United States actually runs a trade surplus with Brazil, so tacking on tariffs would amount to undermining one of the few trade relationships that favors America. Second, 50% tariffs are prima facia unreasonable, amounting to sanction-level punishment, a favorite tactic of the U.S. geared more towards political aims than evening the trade playing field.
Trump's recent flurry of tariff threats make him - and, by extension, the United States - look like a bully, using hard-line tactics to put trading partners at significant disadvantages. Between broken promises on Ukraine, the Epstein matter, balancing the budget, and other matters, Trump's base support is being severely eroded, endangering the Republican party in next year's midterm elections. Beyond the political implications, the economic realities appear to be headed very much in the wrong direction.
Whichever way economists want to twist the math on tariffs, goods coming into the United States become either more expensive, of inferior quality, or the profit margins of exporting companies get squeezed if they decide to "eat" the import duties. The effects are overall inflationary, coming at a time in which the average consumer is being stretched by higher prices on just about everything. The Fed and government number crunchers continue to insist that inflation is coming down, but regular people just aren't buying their narrative.
The other alternative is empty shelves, if enough countries determine that doing business with the United States isn’t worth the effort.
Beef prices, in particular, are through the roof and largely unaffordable for most families. Tacking on extra charges to Brazilian imports - a good portion of it food, and, especially, beef - makes little sense from an "America First" perspective. It has a better chance of being more destructive than productive.
Standing back for a "big picture" perspective, everything Trump has proposed or accomplished over the past few months seems designed to harm America rather than help it. There aren't many people worldwide that he hasn't pissed off of late. The forever wars appear to be back on the table. Government spending will continue to overrun revenue via his big, beautiful bill. The Middle East is far from being settled. Trump continues to attack Fed Chairman Jerome Powell, calling for lower interest rates, a purely inflationary suggestion. The dollar is weaker, and, while it does make American exports more competitive, it makes imports more expensive. By shutting down the Epstein investigation without anyone being charged with anything, Trump's message to his base was clear. He doesn't care to keep campaign promises. After all, he can't run for president again. He's a lame duck already. MAGA loyalists can GF themselves.
It's almost as if the government, now firmly back in the grip of the neocon deep state, wants the American people angry, tired, hungry, drugged, broke, and on the verge of rebellion. Those in charge - now including Trump - seem to want either runaway inflation, a depression, a civil war, or revolution, or a combination of all in order to impose martial law and put everybody under the jackboot of corporatism.
Just a thought.
In any case, the U.S. stock market seems to like most of what's being fed them, at least until today. The NASDAQ and S&P made new highs on Thursday, and the Dow continues to hover near record territory.
Stocks weren't the only things being bought on Thursday. Bitcoin traded at a record-high price and this morning surpassed $118,000. Gold was only marginally higher, but is up nearly $40 Friday morning, at $3,365. Silver has screamed higher, breaking through $37 on Thursday and trading as high as $38.60 Friday morning, prices not seen since 2011.
Stock futures are lower across the board. Whether that plays out in the cash market to close out the week remains to be seen, but there certainly is more than ample stress in financial markets for something not to break soon.
At the Close, Thursday, July 10, 2025:
Dow: 44,650.64, +192.34 (+0.43%)
NASDAQ: 20,630.66, +19.33 (+0.09%)
S&P 500: 6,280.46, +17.20 (+0.27%)
NYSE Composite: 20,678.11, +69.88 (+0.34%)
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