WSJ What’s News - Trump Threatens 50% Tariffs on Brazil

Episode Date: July 10, 2025

A.M. Edition for July 10. President Trump justifies a new tariff threat on Brazilian goods by citing the country’s ‘witch-hunt’ against former Brazilian president Jair Bolsonaro and legal action taken against U.S. tech firms. WSJ reporter Gavin Bade breaks down the economic and legal significance of the president’s latest trade salvo. Plus, copper prices continue heating up after Trump set an August 1st start date for new 50% duties on the metal. And wary of U.S. security guarantees, the U.K. and France offer to use their nuclear weapons to defend Europe. Luke Vargas hosts. Sign up for the WSJ’s free What’s News newsletter.  Learn more about your ad choices. Visit megaphone.fm/adchoices

It won't take long to tell you Neutral's ingredients. Vodka, soda, natural flavours. So, what should we talk about? No sugar added? Neutral. Refreshingly simple. Citing attacks on a political ally, President Trump threatens Brazil with 50% tariffs. Plus, the president sets a date for new copper tariffs

as prices of the metal keep on heating up and wary of U.S. security guarantees the U.K. and France offer to use their nukes to defend Europe. What it says to the U.S. is that, yeah, we're more than capable of standing up for ourselves and the message to the rest of Europe is that, you know, you are now under our nuclear umbrella. It's Thursday, July 10th. I'm Luke Vargas for The Wall Street Journal and here is the AM edition of What's News, the top headlines and business stories moving your world today.

President Trump is breaking new ground in his global tariff blitz by threatening Brazil with a 50 percent duty on its exports starting next month. That marks the highest reciprocal tariff rate Trump has proposed in letters to world leaders this week. And as journal trade reporter Gavin Bade explained, it marks the first time that Trump has gone to bat for a political ally, saying the tariffs were necessary because of legal action being taken against former Brazilian President Jair Bolsonaro, the leader of the country's political right, who's on trial over an alleged coup attempt against

the current government. Trump in this letter really said that the Brazilian government and the Brazilian courts were treating former president Jair Bolsonaro unfairly and engaging in a politically motivated witch hunt. The extent to which this is a negotiating tactic with the Brazilian government and to the extent this is a punitive move, a penalty for how they're treating Bolsonaro, I think that is the big question here, right? Most people are of the opinion in the trading community around DC, certainly on Capitol

Hill, that the rest of these letters, the letters to other trading partners, are basically looking to up the Antian negotiations. They are negotiating tactic, just trying to put extra pressure on countries, particularly a lot of countries where they were close to a deal. This certainly would throw a large wrench into the negotiations. And I don't think that the Brazilian legal system and the legal case against Bolsonaro is something that Lula is going to be especially keen to negotiate away.

Obviously, if Trump is just being bellicose and kind of blowing smoke on that, then maybe we see, okay, if he gets enough market access into Brazil, maybe he'll lower the tariff. But that's going to be a much more difficult thing for the Brazilians to negotiate on than even like protections for their prized industries. Should the tariffs on Brazil kick in next month, Gavin said it could potentially decouple America's economic relationship with its 16th largest trading partner, from which the U.S. sources coffee, machinery, oil, and a variety of chemicals. Out of 50% tariff, it's hard for me to see how really any of those products would be

competitive with domestically sourced products or certainly with imports from around the world. And so you could be looking at an effective trade embargo across multiple tariff lines if these 50 percent duties were to actually go into effect. We have heard from Lula, the sitting president, who said, we're not going to accept any sort of foreign interference or tutelage, he said, from other nations. And I think you could see Lula reacting to this quite bitterly. He's always been a critic of US intervention in Latin America and has not been shy to cozy up to other powers. Of course, having a relationship with Russia and China

as part of the BRICS Consortium, Brazil being the bee in the BRICS Consortium, he's always had kind of a more global south orientation, certainly than Bolsonaro. And so you could see this kind of missive from Trump and these tariffs really pushing him away from the U.S. sphere of orbit and perhaps toward China and those other powers. And a final element of Trump's Brazil letter was an order to open a so-called Section 301 tariff investigation into unfair trade practices over Brazil's legal cases and fines on U.S. tech firms. A move Gavin said could help Trump's broader tariff campaign withstand legal challenge after a federal trade court ruled he lacked the authority to impose sweeping levies on virtually

every nation. The Trump administration is facing an appeals hearing at the end of this month, one day before the new tariffs are supposed to go into place. And so should the court knock down those tariffs based on the International Emergency Economic Powers Act, you know, Trump could really be, see his whole tariff action hollowed out here and they would have to pivot to another legal authority, that could be very difficult. However, Section 301, the stuff that's supposed to strike back the Brazilian digital policies, that seems like it's on much firmer legal footing.

The other wrinkle here is that Trump's justification for those IEPA tariffs, the ones that are at risk, really rests on the argument that persistent trade deficits with major economies are a threat to U.S. national security. Well, it makes it even more difficult in the Brazilian case because we don't have a trade deficit with Brazil. We actually have a trade surplus. We exported more than seven billion dollars more to Brazil in 2024 than we imported from them. And so the legal underpinning of these tariffs is very, very questionable because the case here does not really fit what they prescribe these tariffs for at all. I imagine that any lawyers for, you know, U.S. exporters to Brazil are sharpening their

knives figuratively tonight because there's a lot of ways to go about slicing these tariffs up in court. That was Journal trade reporter Gavin Bade. Meanwhile, another of President Trump's threatened tariffs, a 50% levy on copper, to begin on August 1st, has sent mining stocks and the price of metal surging this morning. And here to discuss the significance of that is my colleague, Joe Wallace. Joe, just quickly, for my benefit here, remind me why copper matters and why Trump is reaching for these tariffs. Well, copper is used in pretty much everything, a lot of electronics, construction, no doubt

it has all sorts of defense applications. And the US, while producing a lot of copper, it imports about half of what it consumes. And so Trump's justification here is that there's national security rationale for making the US much more self-sufficient in copper and cutting down its import dependency. He said on Wednesday when announcing the date for these levies that he'd received a national security report underlining the importance of copper. And, of course, as we see, the prospect of those levies has really had a market impact. Who are the potential winners and losers here?

So, the price of copper in the US has really zoomed higher. So, anyone consuming copper in the US, be that an electronics company, a manufacturing company, they're going to be suffering. Prices are up 40% so far this year. Anyone producing copper in the US or elsewhere for that matter is a big beneficiary. We've seen mining stocks, Freeport McMorran in the States, Glencore, Rio Tinto and others elsewhere really posting some quite significant gains. Elsewhere in the world, copper prices could decline because there's going to be less of a pull for copper into the US than there has been so far this year. There's been an enormous amount of front-running people importing huge amounts of copper into the States so far this year, but that will come to an end. And that should mean there's

more copper for the rest of the world to consume. So if you're a copper consumer in Europe or in Asia or in the Middle East, you're probably a beneficiary of this. Joe, thank you so much. Appreciate you stopping by. Thanks, Luke. Coming up, we have got the rest of the day's news, including a proposal by the UK and France to extend nuclear protection to their European allies. We've got that story and more after the break. What's better than a well-marbled ribeye sizzling on the barbecue?

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France and the United Kingdom say they will now coordinate the use of their nuclear weapons and respond to any major threat to Europe together, essentially creating a nuclear deterrent for the continent. Defense reporter Alastair McDonald says the announcement is likely to reassure allies who are nervous about Washington's commitment to Europe's security and comes amid increasing concerns over Russian aggression. The British government would argue that we're living in a new world in which Russian aggression has become such that they sort of have to remind the world

that they are a nuclear power in their own right and that they don't need to rely on the US. This is debatable, but in terms of the optics, it's quite significant. The message of what it says to the US is that, yeah, we're more than capable of standing up for ourselves. And the message to the rest of Europe is that, you know, you are now under a nuclear umbrella. Meanwhile, Russia has hit Ukraine's capital, Kiev, with another major missile and drone

attack overnight, causing fires in the city and killing two people. It comes just a day after the largest assault yet, in which Russia launched 728 drones and decoy munitions at cities in western Ukraine. Ukrainian President Volodymyr Zelenskyy said the attack showed again that Russia has no desire to end the war. Back in Washington, President Trump has tapped Transportation Secretary Sean Duffy to be the interim chief of NASA, which has been without a permanent leader since January.

The announcement comes after the president withdrew his nomination of entrepreneur Jared Isaac Minton to become the agency's leader back in May. In social media posts over the weekend, Trump questioned Isaac Minton's past political donations to Democrats and his ties to Elon Musk. And we are exclusively reporting that Ferrero, the Italian candy maker behind Ferrero Rocher and Nutella, is nearing a roughly $3 billion deal to buy breakfast cereal giant W.K. Kellogg, barring any last-minute snags and talks. W.K. Kellogg is the company behind Froot Loops, Frosted Flakes, and Rice Krispies, and the

product of Kellogg spinning off its North American cereal business into a separate publicly traded company about two years ago. The remaining global snacking business, Kellenova, agreed to sell itself to Mars in a more than thirty billion dollar blockbuster transaction last year. And that's it for What's News for this Thursday morning. Today's show was produced by Kate Bulevent and Daniel Bach. Our supervising producer was Sandra Kilhoff, and I'm Luke Vargas for The Wall Street Journal. We will be back tonight with a new show.

Until then, thanks for listening.