Trade war live: Donald Trump threatens Brazil with 50% tariffs

Donald Trump said Brazil would be subject to US tariffs of 50 per cent on its goods, accusing the country of treating former president Jair Bolsonaro unfairly.

In the eighth letter published to social media on Wednesday, Trump said Bolsonaro was a “Highly Respected Leader throughout the world during his Term.”

“This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!” Trump wrote.

He added that the tariff would be applied “in part” because of Brazil’s “insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans.”

Bolsonaro is on trial over an alleged coup plot, which prosecutors say aimed to keep him in power after losing an election in 2022.

Brazil was previously facing a tariff of 10 per cent.

Chile’s foreign minister Alberto van Klaveren said the US would not be able to replace the copper it is importing from the Latin American nation or other countries that supply it.

“Chile will obviously continue to find a market for its copper, there’s no doubt about it. The world needs copper because copper is essential for the energy transition that is taking place around the world,” van Klaveren said at a press conference on Wednesday.

“The US will continue to need copper, basically because it doesn’t have the capacity to replace the copper it’s importing from Chile or other countries that supply it.”

His remarks follow US President Donald Trump’s announcement that he would impose 50 per cent tariffs on copper imports, though van Klaveren said that there is no formal policy announcement from the Washington yet.

Brazil’s vice-president and trade minister, Geraldo Alckmin, described the new rate as “unfair” and said his country was not a problem for the US.

“The US does have a trade deficit, but it has a surplus with Brazil,” he said.

“The measure is unfair to Brazil and harms the American economy itself, because there’s integration in trade.”

Using steel as an example, Alckmin said Brazil is the third-largest buyer of US steelmaking coal. “We make the semi-finished product and sell it to the US, which finishes it. So, by imposing taxes, they increase the cost of their own supply chain.”

Donald Trump’s letter to Brazil announcing a 50 per cent tariff follows his threat of an extra 10 per cent levy against members of the Brics bloc of developing nations, of which the Latin American country is a founding member.

At a summit of the grouping this week in Rio de Janeiro, leftwing president Luiz Inácio Lula da Silva hit back at the warning and reiterated calls for countries to reduce dependence on the US dollar for trade — a proposal that Trump had already taken aim at.

Brazil’s real tumbled 2.5 per cent against the dollar after Donald Trump announced his plan to impose a 50 per cent reciprocal tariff on Brazil’s imports to the US.

The majority of US Federal Reserve officials warned at its June meeting that Donald Trump’s tariffs would have “persistent effects” on inflation amid a growing schism over when to cut interest rates.

Minutes from the Federal Open Market Committee’s meeting on June 17-18 showed that while some rate setters believed the levies would trigger a one-off price increase, most were more worried about the longer-term impact.

“While a few participants note that tariffs would lead to a one-time increase in prices and would not affect longer-term inflation expectations, most participants noted the risk that tariffs could have more persistent effects on inflation,” according to the minutes released on Wednesday.

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Donald Trump sent another batch of letters to seven countries threatening new tariff rates as his administration continued to wage its trade war against the US’s trading partners.

The US president posted the letters to his social media account on Wednesday, with the group comprising Algeria, Brunei, Iraq, Libya, Moldova, the Philippines, and Sri Lanka.

The tariff levels in the letters ranged from 25 to 30 per cent and will apply from August 1.

Trump said “a couple more” trade letters would be “coming out today”, as he answered questions during a meeting with African leaders at the White House on Wednesday.

A letter to Brazil on trade would be released on Wednesday or Thursday, Trump continued as he singled them out as a country that “has not been good” to the US.

The latest letters follow similar correspondence from Trump to 14 other countries on Monday, including trading partners as big as Japan and South Korea. He also pushed out the deadline that tariffs would go into effect to August 1 from July 9 previously.

Trump on Tuesday said he would impose 50 per cent tariffs on copper imports, an announcement that reverberated across the market for the world’s most important industrial metal over the past two days. The US president also floated the idea of a 200 per cent tariff on pharmaceuticals.

Donald Trump said he would be releasing a letter to Brazil on trade later on Wednesday or Thursday, warning that the Latin American country had not been “good” to the US.

“We’re going to have a couple more coming out today,” Trump said, answering questions during a meeting with African leaders at the White House.

“Brazil, as an example, has been not good to us. Not good at all,” he added.

Donald Trump posted seven letters to countries threatening new tariff rates to his social media account on Wednesday as he continued to wage his trade war.

Countries receiving the second batch of letters included the Philippines, Brunei, Moldova, Algeria, Iraq, Libya and Sri Lanka.

The tariff levels in the letters ranged from 25 per cent to 30 per cent and will apply from August 1.

The US imported about $17bn of copper and derivative products in 2024, according to trade data from the US Census Bureau.

Chile was the US’s largest supplier, making up roughly one-third of imports primarily in the form of refined copper. Canada and the EU were the largest import partners for derivative products such as copper wire, tubes, bars and plates.

Total trade in copper and derivatives was worth $171bn globally in 2023, according to the most recent harmonised international trade data from CEPII. China was the dominant buyer, making up about one-third of cross-border demand, followed by the EU and the US.

Stock markets reached recordhighs on Wednesday as investors waited for news about US trade deals, including with the EU.

In Germany, the Dax index climbed 1.3 per cent to reach a recordhigh. Wall Street’s tech index, the Nasdaq Composite, also briefly touched an intraday record before falling back slightly to trade 0.6 per cent higher.

The S&P 500 was up 0.2 per cent by late morning in New York, and the Stoxx Europe 600 index was 0.7 per cent higher.

“Everything getting delayed is being taken as good news,” said Neil Birrell, chief investment officer at Premier Miton.

Birrell suggested that the market was pricing in a tariff level of about 10 per cent, adding that “if anything is worse than that then I think there’s room for disappointment”.

Chile’s mining business chamber Sonami said the Trump administration had “no technical or strategic grounds to justify” tariffs on Chilean copper, which makes up 70 per cent of US imports in dollar terms.

“Our industry is globally recognised for its transparency, traceability, and adherence to multilateral rules,” Sonami president Jorge Riesco said in a statement. The US accounted for “a limited share of less than 7per cent” of Chile’s refined copper exports, he continued, “which reduces the direct effects of a potential tariff”.

Sonami, which represents mining companies in the world’s biggest copper producing country, was “concerned about the indirect effects” ofa potential tariff announcement by Trump and warned that a new trade war could “affect investment decisions in new mining projects”.

Wall Street stocks advanced in early trading, even as investors waited for more tariff updates, including details of an EU-US trade deal.

The S&P 500 index was up 0.6 per cent shortly after the opening bell on Wednesday. The tech-heavy Nasdaq Composite rose 0.7 per cent.

European stocks also remained upbeat ahead of the expected deal announcement. Germany’s Dax index was 1.5 per cent higher.

The US dollar was flat against a basket of other currencies.

Donald Trump’s vow to impose 50 per cent tariffs on copper imports reverberated across the market for the world’s most important industrial metal on Wednesday.

Although US copper prices shot higher after the US president delivered his threat on Tuesday, the global price on the London Metal Exchange sank on Wednesday as traders bet that tariffs would ultimately hit demand for the metal.

“Eventually, physical demand growth for copper worldwide will come under pressure, as downstream players seek to defer consumption,” said commodities analyst Tom Price at Panmure Liberum.

The US imports about 60 per cent of its copper, with the rest met by domestic mines or recycled scrap.

Stocks of copper on New York’s Comex exchange had earlier hit record highs this month on expectations that Trump would eventually target imports. The metal is widely used in electronics, construction and industrial equipment.

Prices for the metal on the Comex were down 2.1 per cent on Wednesday morning at $5.53 a pound, having surged about 13 per cent to a record high in the previous session.

“The reaction in the copper market to Mr Trump’s announcement was fast and furious,” said Ed Meir, a consultant to Marex, a commodities broker, adding that a 50 per cent tariff would be a “massive hit” for US consumers.

Howard Lutnick, commerce secretary, said in a CNBC interview on Tuesday that he expected the duties to be put into place as soon as the end of this month.

Traders said that this year’s rush to get copper into the US would probably slow, with shipments set to arrive after August 1 likely to be rerouted to avoid the tariff hit.

The US government should exempt Zambia from the 50 per cent import tariff on copper, according to the chair of the Zambian state-owned mining company ZCCM.

Zambia, the second-largest copper producer in Africa, is partnering with the US to develop the Lobito Corridor, a railway line that will enable the landlocked country to ship minerals to western countries.

Kakenenwa Muyangwa, chair of ZCCM, told theFT he was “concerned” about the impact copper tariffs would have on the nascent project, and called on the US — which has provided a $550mn loan — to provide waivers for Zambian copper imports.

“The whole premise of the Lobito Corridor is that these critical minerals such as copper should be going to the USA,” said Muyangwa.

“Hopefully there could be some waivers down the road,” he added.

The EU wants a permanent full-scale trade deal with the US with a likely framework agreement just a stop gap, European trade commissioner Maroš Šefčovič has said.

The temporary agreement, likely in “coming days”, was a “foundation that paves the way for a full EU-US trade deal”, Sefcovic told the European parliament.

Brussels hopes to sign the framework before an August 1 deadline to avoid an increase from 10 per cent baseline “reciprocal” tariffs.

Sefcovic said the deal would be unbalanced, with higher tariffs on the EU than the US, but that the bloc’s “regulatory autonomy remains intact”.

Prysmian, an Italian cable maker and the biggest consumer of copper outside China, is one company that investors are betting could end up as a winner from the tariffs.

Shares in the Milan-listed group, which generates about 35 per cent of its revenues in the US, were up 4 per cent on Wednesday. According to Citigroup, Prysmian relies on mines in the US for its copper, shielding it from any potential tariffs.

Chief executive Massimo Battaini told the Financial Times in January that he expected Donald Trump’s administration would favour companies with local production.

Wall Street futures and European stock markets were higher as investors grew optimistic that US and EU negotiators were closing in on a trade deal.

The EU said on Wednesday it was aiming to strike a deal with the US in the coming days.

Financial markets appeared calm on Wednesday, as investors braced themselves for the next wave of tariff announcements from the White House.

Futures tracking Wall Street’s blue-chip S&P 500 index were 0.1 per cent higher before the market opened. The dollar ticked up 0.1 per cent against a basket of currencies.

“It’s tariff fatigue,” said Venu Krishna, head of US equity strategy at Barclays. “Thelevel of policy uncertainty has been draining.”

Some analysts said the muted reaction was justified. “The [tariff] letters have been well publicised, and the tariffs remain around the same levels announced in April,” said analysts from UBS in a note on Wednesday.

“We believe the US effective tariff rate should end the year at around 15 per cent. This would be a headwind to growth but not enough to trigger a recession,” the note added.

The EU is aiming for a trade deal with the US in the coming days, European Commission spokesperson Olof Gill said.

“The US has moved its deadline for finalising its deals with partner countries to the first of August, however we aim to reach a deal before then, potentially even in the coming days,” Gill said.

Brussels is aiming for a framework deal, after which talks would continue. “Reaching a deal now depends on the willingness to find an outcome that is acceptable to both sides,” Gill said. He added that the EU would be “firm” and was preparing for all scenarios but that it would “prefer a negotiated solution”.

The EU’s trade chief Maroš Šefčovič will speak to US trade representative Jamieson Greer later today, he said.

European pharmaceuticals stocksfell on Wednesday morning after Donald Trump’s threats to impose levies of up to 200 per cent on the sector.

Analysts from Barclays said a lengthy transition period “should lead to greater investments in the US”, adding that it expected no immediate changes to its corporate ratings as “there are still a lot of moving parts”.

US tariffs will weigh on insurers’ profits, with the US motor insurance market set to be hit hardest, according to research from the Swiss Re Institute.

The reinsurance group forecast that inflation-adjusted global economic growth would slow to 2.3 per cent this year, compared to 2.8 per cent last year. Global insurance premium growth, meanwhile, would slip to 2 per cent, down from 5.2 per cent last year.

Swiss Re said tariffs are expected to increase prices in the US for car parts and replacement vehicles, lowering insurers’ margins when vehicles are physically damaged. However, the group added that non-US marine insurance could benefit from “supply chain realignment” if other economic blocs increase trade among themselves.

Jérôme Haegeli, Swiss Re’s Group chief economist, said that overall the tariffs would reduce demand for insurance, adding: “US tariff policy is another move towards more market fragmentation, which would reduce the affordability and availability of insurance, and so diminish global risk resilience.”

Most British companies would withstand sharply higher tariffs even if their earnings fell 10 per cent and their borrowing costs surged, according to the Bank of England’s assessment of risks from US President Donald Trump’s trade war.

“Despite some pockets of vulnerability, UK corporates would, in aggregate, be able to service their debts even in the face of further global shocks such as lower global demand and supply,” the bank said in its financial stability report published on Wednesday.

UK companies that are more exposed to the risk of a trade shock account for about 60 per cent of jobs in the country but only 30 per cent of corporate debt, which the bank said showed they typically had borrowed less than other companies.

“It would take significant macroeconomic shocks for aggregate debt servicing measures to deteriorate materially,” it said.

Germany’s chancellor Friedrich Merz said reaching a deal with the US over trade tariffs was “not easy”, suggesting that a settlement may not materialise until after the deadline set by Donald Trump this week.

Merz told parliament on Wednesday that there were “intense talks” between the EU Commission and the US president and that he remained in “close contact” with both parties to reach an agreement “as soon as possible”.

But he cautioned: “Achieving this goal is not easy given the current demands of the American government.”

He added: “I am cautiously optimistic that we could be able to reach an agreement on this with the United States of America in the next few days, by the end of the month at the latest.”

The EU is insisting on a US commitment to reduce high sectoral tariffs on the bloc and not impose new ones as part of a “framework” trade agreement.

Bernd Lange, chair of the European parliament’s trade committee, said the framework deal, expected before August 1, “should lead also to a significant reduction of tariffs until we have the final deal ready”, mentioning steel and cars.

“And . . . we want to have a stand still in force so that when we have a final package we are not faced with another tariff or whatever kind of measure,” adding that the US had not yet promised either.

Last night President Donald Trump announced 50 per cent tariffs on copper and possibly up to 200 per cent on pharmaceuticals.

The EU is “working closely” with the US to secure an outline trade deal, European Commission President Ursula von der Leyen said on Wednesday.

Speaking in the European parliament on the day of the original July 9 deadline for a deal, she said the 27 member bloc wanted a “clear framework — from which we can keep building”. The bloc had prepared retaliatory tariffs if Trump follows up on his threat to impose 50 per cent tariffs from August 1.

“We stick to our principles. We defend our interests. We continue the work in good faith. And we get ready for all scenarios,” she said

As Donald Trump’s latest tariff threats threw global copper markets into turmoil EU negotiators closed in on a trade deal with Donald Trump that would cement higher tariffs than those granted to the UK.

Brussels is ready to sign a temporary “framework” agreement that sets the US president’s “reciprocal” tariffs at 10 per cent while talks continue, matching the baseline duty imposed on the UK.

But the EU is not expecting to achieve the same access to the US market as British steel, cars and other products subject to sectoral duties, according to six diplomats briefed on the issue.

Shares of Zijin Mining, China’s largest copper miner, dropped on Wednesday during trading in Asia following Trump’s threat of 50 per cent tariffs on the metal.

The Hong Kong-listed shares of Zijin fell 3.4 per cent, making it among the worst performers on the Hang Seng index on Wednesday.