Five Ways Of Looking At Trump's Sanctions Against Brazil

Let's transition back from vacation with an easy one.

Photo by Samuel Costa Melo on Unsplash

The hard-working staff here at Drezner’s World is back, baby!! After two weeks of not working very hard at all, the staff feels depressed at how much bad news happened in the interim refreshed and rejuvenated to discuss the important issues of the day.¹ And there is much to discuss! There is Trump’s evisceration of the State Department, and then there’s Trump’s evisceration of the U.S. research and development infrastructure, and then there’s Trump’s evisceration of America’s credit rating, and so forth.

But to ease myself back into the swing of posting, let’s start with an easy request. I was asked recently on social media whether I had posted anything about Trump’s threat of 50% tariffs against Brazil — in particular, “how Trump is basically treating tariffs like sanctions for behavior or conditions of which he disapproves?”

Trade policy and sanctions policy?! Sounds pretty interesting!! And I do have some thoughts.

In no particular order:

First, yeah, this is definitely illegal. Recall that the administration lost a decision at the U.S. Court for International Trade that found all the tariffs imposed under IEEPA were beyond the president’s powers. That decision has been stayed while it works through the appeal process, but it is worth noting that this is even more egregiously illegal. As Paul Krugman observes, “the Brazil tariff is something else: It’s not about economics at all, it’s an attempt to interfere with another country’s politics. Who says so? Trump…. {trump’s] letter is basically a confession that he is imposing a tariff for non-economic reasons. And that’s not legally allowed.” Those suing Trump for the illegal nature of these tariffs sound like they’ll be delighted to add this case to their hopper.

Second, this is a reminder that his trade policy ain’t working too good. Recall that back in April the hard-working staff here at Drezner’s World was… let’s say “pessimistic” about Trump’s trade strategy. The Brazil letter is just one of many that Trump fired off via social media — and a further reminder that despite administration claims of productive negotiations, they have accomplished very little. I count framework deals with the U.K. and Vietnam and that’s pretty much it except not Vietnam, not really.

The Brazil letter highlights one problem with this kind of bargaining strategy: the lack of clarity of Trump’s goals. Is this about trade, or political objectives, or what exactly? As Catherine Rampell asked, “Anyone who claims that Trump's trade wars are brilliant deal-making needs to reckon with the fact that he has no idea what his own objectives are. How do you negotiate with someone who doesn't know what he wants?”

Third, Brazil is unlikely to comply for so many reasons. The U.S. has trade leverage to the extent that other countries need the U.S. market. But as multiple observers have noted, the United States actually runs a trade surplus with Brazil, so that won’t matter all that much. Brazilian markets were not thrilled about the news, but neither were they panicked. As Reuters reported, local investment manager ARX Investimentos said in a client note that, “their macroeconomic impact would be modest [but] when combined with a coordinated economic policy response, Brazil is well positioned to neutralize adverse effects and preserve economic stability, even in a scenario of rising global trade protectionism.”

What about political pressure? Politico’s team did a solid job of explaining why Brazil is unlikely to yield:

Regional experts suggested Trump’s threat to impose punitive tariffs on Brazil as a tool to pressure its government to drop charges against Bolsanaro are likely to backfire.

“The Brazilians will be incredibly offended — it’ll be counterproductive in terms of what Trump is trying to do on the trade side with Brazil,” said Stephen McFarland, who was ambassador to Guatemala during the Obama administration and who served in Latin American diplomatic postings in countries including Ecuador, Peru, El Salvador and Bolivia. “There’ll be a strong nationalist reaction that ironically will boost Lula because it will be hard for Lula’s opponents to clap for somebody who’s trying to humiliate a Brazilian president.”

Jorge Heine, former Chilean ambassador to both China and South Africa, also predicted the threat is “not going to go down well in the region.”

“There was an attempt at a military coup in Brazil supported by Bolsonaro,” Heine said, “and what the United States is saying is that this should go unpunished, or otherwise, the U.S. will impose these very high tariffs, which is unprecedented.”

It is therefore unsurprising that Brazil’s s President Lula responded to Trump’s threats on social media with a refusal to make any concessions and threats of retaliatory tariffs. Indeed, as CNN noted, “This marks the first time in months another country has threatened to match Trump’s tariff threat.”

Fourth, this is yet more evidence of this administration’s lack of impulse control. As Politico explained, Trump imposed these tariffs because he was angry and impatient:

President Donald Trump is framing his threat to slap a bruising 50 percent tariff on Brazil as a quest for justice for his friend and ally, far-right former President Jair Bolsonaro.

But it was his displeasure at a gathering of emerging market nations in Rio de Janeiro over the weekend that tipped the president over the edge, convincing him to send a letter laying out the new levies, according to four people familiar with the situation granted anonymity to share details.

The White House concluded that other methods of punishing Brazil for its perceived mistreatment of Bolsonaro and its alleged censorship on social media, like sanctions, would take too long or were too complex, according to two of the people….

Okay, but since: a) these tariffs will likely get thrown out in court; and b) they will provide a domestic boost for Lula, I doubt that they will have much of an effect. Mostly these tariffs serve as a reminder that Trump mostly likes to lash out and has very little bargaining skill.

Fifth, this puts the lie to the MAGA claim that an America First foreign policy does not care about another country’s domestic politics. I first noted this in my World Politics Review column from April:

Indeed, the closer one looks at the second Trump administration’s policy moves to date, the more they begin to resemble the process… of how a democratic hegemon exercises influence, but in reverse. Trump and his foreign and national security team are decidedly uninterested in promoting democracy, as evidenced by their efforts to eliminate the U.S. Agency for International Development, or USAID, as well as Voice of America, Radio Free Asia and the National Endowment of Democracy. But as Vance’s rhetoric made clear, they are very interested in promoting populist rulers—and also eager for those leaders to foster a patrimonial relationship with the United States….

On trade and patronage networks, the Trump administration has not been shy about playing favorites in its discussion of foreign economic policy. The occasional threat aside, Trump officials talk optimistically about opening up access to the Russian market. At the same time, the Trump White House has taken pains to punish liberal democratic allies like Canada, Mexico and Europe with tariffs.

Fast forward to the Brazil tariffs, and a pattern starts to emerge. As Axios’ Dave Lawler reports, this episode is “not the first time Trump has weighed in on judicial proceedings against right-wing politicians overseas, or claimed political and judicial elites abroad are using the same ‘playbook’ deployed against him.” Time’s Chad de Guzman elaborates, “From Israeli Prime Minister Benjamin Netanyahu, whose corruption trial Trump has urged the end of, to most recently former Brazilian President Jair Bolsonaro, whose affinity for and similarities to the U.S. President have earned him the nickname ‘Trump of the Tropics,’ Trump has tried to wield the influence of the U.S. government to keep his friends from facing charges in their own countries.” Trump has also railed against the French prosecution of Marine Le Pen.

For a president who likes to bask foreign policy adventurism, his administration sure seems hell-bent on getting into some adventures of its own.

So, to sum up: this is a dumb policy in a variety of ways that reveal an array of administration lies but also exposes an awful lot of stupidity as well.

1. Also, this weekend I promise a vacation reflection post with some great tourist-y pics!