The Peter Zeihan Podcast Series - Tariffs Hit Brazil + Live Q&A Announcement || Peter Zeihan

Episode Date: July 16, 2025

We’re excited to announce our next Live Q&A for the Analyst members on Patreon on Wed, July 30! Join the Analyst Tier in July and we'll donate your membership fees to MedShareJoin the Patreon here: https://www.patreon.com/PeterZeihanMore info on MedShare here: https://www.medshare.org/disruptions-in-humanitarian-aid-zeihan/ Over the past 6 months, we've seen Trump use tariffs for everything under the sun. But the Brazilians just got hit with a 50% tariff for an unorthodox reason…because their former president is being prosecuted.Full Newsletter: https://mailchi.mp/zeihan/live-qa-announcement-and-brazilian-tariffs

Hey everybody, Peter Zine here coming to you from Colorado. This is my official pitch for you guys to join us on Patreon because anyone who has joined us on the analyst level of Patreon on the 30th of July this month gets an opportunity to try to stump me in person. You get to submit your questions to me live and I've got to go through them and I don't have a lot of choice as to what I try to answer. You can also get your questions in early if you want a more coherent answer. But if you want to make me look dumb, this is how. So sign up now. All proceeds from all signups for the entire month are going to be going to MedChair, which is a charity that we support here that provides medical assistance to communities who, for reasons beyond their own capabilities, have now fallen prey on to hard times. So like if the Russians are bombing your infrastructure, Medchair comes in and helps out with generators for hospitals. So join, stump me, help people. Everybody wins. Hey, all, Peter Zine here, coming from Colorado. Picking season.

The world won't leave me a load, of course. I need to go someplace with less coverage. Anyway, the news I want to talk about today is we have another, another, another, another 50% tariff going into place. This one against Brazil. Now, Brazil is one of those countries that kind of side and relief back on April 2 when those big game board sheets came out, when Trump announced what the tariff levels were going to be for everybody.

We don't have a goods deficit that's worth talking about with Brazil, so Brazil qualified for the low 10% on the... everybody tariff. And that's where it was left. But last week, Donald Trump decided, nope. He is starting to expand his idea that tariffs are good to punish countries that are doing things he doesn't want, even if they have nothing to do with economic issues. It is beyond questionable, whether this is legal under American law, but until Congress steps

up and acts, which I don't anticipate anytime soon, It is what it is. Trump's reason for putting a 50% tariff on Brazil, we're going to stop uphill, bad idea. Trump's reason for doing a 50% tariff on Brazil is that the Brazilians are in the process, Brazilian government is in the process of prosecuting a guy by the name of Bolsonaro, who's a former president

who attempted a coup after he lost an election. Sound familiar? Anyway, Trump is saying that unless prosecution stops and Bolsonaro is allowed back into the political system that this tariff will go into place. Now, we do buy a bunch of things from Brazil, but it's mostly relatively low value-added commodities, some really crappy beef, some agricultural products, things like iron ore. Brazil is a very low-value-outed economy. And Trump, on ideological grounds for a mix of reasons, finds himself allied with Bolsonaro

and opposed to Lula, who is the current president who, hails from the left side of the political spectrum, whereas Bolsonaro is from the right. It's a messy comparison. Brazilian politics are significantly different from the United States, so don't over a peek under those two hoods. Anyway, I, for a long time, have not been a fan of Lula, but not because of rule of law issues. He's anti-American to the point that's borderline pathological and is willing to even sell his own country down the river in order to achieve a degree of independence from the United States,

which is just dumb, in my opinion. So, for example, when he was present the first time around, he basically invited the Chinese in to form joint ventures with everything that the Brazilians were doing. And throughout the 70s, 80s and 90s, the Brazilians actually made a lot of progress in moving up the value-added scale. Their oil company, Petrobras, is one of the world's best, especially in Deepwater. They had a construction company that was world-class, and they had a really dense concentration of mid-sized companies that were really pushing the technological envelope on all of their products and they were globally competitive. Well, the Chinese formed joint ventures with all of these companies, stole all the technology,

took it back home, subsidized the crap out of building an alternative industrial plant, and then drove all the Brazilian producers out of business. Strategically stupid, economically stupid. But what's going on with Bolsonaro is something different. This is a rule of a law issue. when Trump did his little attempted push back in, was it 2020? Yeah, 2020. He eventually got away with it and he eventually returned to power and pardoned everyone who was basically a co-conspirator.

Bolsonaro hasn't had that kind of advantage. He was both smarter and dumber. Smarter in that he learned from Trump's failure back in 2020 and went for a much more direct assault on the Brazilian Congress trying to basically take it out of the equation. And then when that didn't work, he fled the country. It came coming to Florida, ironically, which is like much better attempt and much better demonstration of actual guilt. So no one in Brazil really thinks that this case is going to go anywhere except for with Bolsonaro in jail unless he's pardoned in order to, say, heal the political spectrum.

Anyway, for Trump, this gets a little bit too close to home. And so he's now threatening Brazil with economic retribution for their rule of law. law commitment. Now, for those of you who don't follow Latin American politics all that much, Latin America overall is new to democracy and is new to rule of law. Most of the countries back in the 60s, 70s, and 80s were military dictatorships. And when those dictatorships fell and in many cases, like in Brazil, actually actively turned over power to the civilian system, it went fairly smooth. The problem has been maintaining the center of the state. And so that law enforcement can work.

Because when you go from a system that's pretty corrupt with a bunch of colonels and generals, basically calling all the shots and getting whatever they want, to a system that's much more freeform, it takes a while for law enforcement to kind of step in the gap when the military stepped back into reassert a degree of security. And Brazil in particular has had a problem with that, and so it has some of the highest crime rates in the world. So most American foreign policy since that transition,

which happened in the late 80s and into the 90s, has been focusing on increasingly. encouraging rule of law across Latin America whenever it can happen. And you can find a lot of faults in American foreign policy in any region, specifically Latin America, but I would argue that it's been broadly successful on at least this one point. And so to have the American president now trying to go ramshackle the opposite direction and ripping up rule of law is a horrible idea. Because if your goals are to get Latin American countries to assist with enforcement of U.S.

immigration preferences and to assist with limiting the amount of narcotics can come from Latin America to the United States, you need a relatively strong state. And knocking over rule of law at the top is arguably the dumbest thing that you could do. And yet here we are.