- Trump imposes 25% tariffs on all auto imports
- Lula warns tariffs threaten global economic stability
- Japan faces $7.4B trade deficit with US, seeks exemptions
- Brazil considers WTO complaints and reciprocal measures
- US-Brazil trade surplus grows 32% to $7.4B in 2024
Brazilian President Luiz Inácio Lula da Silva delivered a sharp rebuke of U.S. trade policy during his final day in Tokyo, arguing that President Donald Trump’s new auto tariffs undermine international cooperation. The 25% levy on foreign vehicles, announced just days before Lula’s Asian tour, has intensified fears of a global trade war as Japan scrambles to protect its $51B automotive export industry.
Analysts note the tariffs could disrupt North American supply chains, particularly for Brazilian steel manufacturers that supply 18% of U.S. infrastructure projects. “These measures punish allies more than competitors,” Lula stated, highlighting that 72% of Brazil’s petroleum exports flow to American refineries. Meanwhile, Japan’s Prime Minister Shigeru Ishiba confirmed plans to accelerate a bilateral technology pact with Brazil, aiming to reduce reliance on U.S.-dominated markets.
Regional tensions flared further as Tokyo’s Chief Cabinet Secretary Yoshimasa Hayashi called the tariffs “economically destructive,” noting Japanese automakers employ over 1.5M U.S. workers. Industry data reveals the policy could increase average car prices by $6,400 in America – a 14% spike that may dampen 2025 auto sales projections by 9%.
Brazil’s proposed countermeasures include targeted levies on U.S. agricultural machinery, a sector representing 29% of America’s exports to the South American nation. However, economists caution that Brazil’s $23B energy trade surplus with the U.S. complicates retaliation efforts. The developing alliance between Japanese tech firms and Brazilian raw material suppliers signals a strategic shift toward multipolar trade networks.
As the WTO prepares to review formal complaints from six nations, Lula emphasized multilateral solutions: “No single country can dictate 21st-century commerce.” With U.S.-Brazil trade volumes exceeding $112B annually, experts warn prolonged disputes could destabilize emerging markets reliant on commodity exports.