First Casualties From Trump's Increasing Tariff Craze
July 10, 2025
Yesterday U.S. President Donald Trump imposed a 50% tariff on all products from Brazil.
His letter to President Lula of Brazil was published before it had been received. That and its content make it unprecedented.
Trump demands that the trial against former president Bolsanero, who had tried to instigate a military coup after he had lost the last election, should be immediately end.
He demands the lifting of orders by the Brazilian Supreme Court against certain posts on U.S. owned social media should be lifted. These orders, which only relate to social media viewable in Brazil, are claimed to be 'against fundamental free speech rights of Americans'.
Both of those issues are under control of the judiciary of Brazil. The government has no legal means to alter them.
Trump claims that there is a 'very unfair trade relationship engineered by Brazil' which has led to 'unsustainable trade deficits against the United States'. But as the NY Timesnotes (archived) correctly:
For years, the United States has generally maintained a trade surplus with Brazil. The two countries had about $92 billion in trade together last year, with the United States enjoying a $7.4 billion surplus in the relationship. The top products traded are aircraft, oil, machinery and iron.
Brazil will of course have nothing of it:
A few hours later, Mr. Lula said that Brazil would reciprocate against the tariffs. “Brazil is a sovereign country with independent institutions that will not accept being abused by anyone,” he said in a statement.
He added that the case against Mr. Bolsonaro “is the sole responsibility of the Brazilian Judiciary.”
That Brazil will reciprocate is good for Airbus and bad for Boeing.
Brazil was one out of fifteen, mostly Asian, countries which yesterday received nasty tariff letters:
At least 14 countries’ imports are set to face steep blanket tariffs starting Aug. 1, President Donald Trump revealed Monday.The president, in a series of social media posts, shared screenshots of form letters dictating new tariff rates to the leaders of Japan, South Korea, Malaysia, Kazakhstan, South Africa, Laos and Myanmar.
Later in the day, he shared another set of seven letters, to the leaders of Bosnia and Herzegovina, Tunisia, Indonesia, Bangladesh, Serbia, Cambodia and Thailand.
Tariffs on general U.S. imports from these countries will rise to 25-40%.
All of the letters say that the blanket tariff rates are separate from additional sector-specific duties on key product categories.
Another crazy sector-specific duty put in place yesterday is a 50% tariff on the U.S. import of copper:
President Donald Trump said Tuesday he’s imposing a new 50% tariff on all copper imported into the US. However, it’s unclear when the new tariff would take effect.“Today we’re doing copper,” he said at a Cabinet meeting, adding that he believed the rate will be 50%.
This would mark the fourth across-the-board tariff Trump has imposed during his second term. Currently, most imported cars and car parts face a 25% tariff, while imported steel and aluminum both face 50% tariffs.
This will definitely increase U.S. prices:
Copper futures soared 17 percent – the highest rise during a day since 1988 – before coming down.Americans now pay 138 percent over the global benchmark, CNBC reported. That comes despite plentiful supply of the metal, which has a variety of uses in manufacturing and technology.
Experts say those price spikes could easily transfer to increased costs for U.S. consumers on products ranging from refrigerators, electric cars, and air conditioning units.
The U.S imports some 50% of the copper it needs. The tariffs will increase the profits of U.S. copper producers which will naturally increase their prices. They may help, over time, to develop new U.S. copper mines but products from those are decades away.
The increased price for copper will not only hit U.S. consumers but it will also increase the cost of industrial products, like transformers and motors, the U.S. is trying to export. The tariffs thus won't help with trade deficits.
Meanwhile the first casualties from the tariff craze are coming in:
Heritage canned‑food maker Del Monte Foods has filed for Chapter 11 protection, citing credit pressures and “stunning increases” in packaging costs, driven in large part by President Donald Trump’s decision in early June to double U.S. tariffs on imported steel and aluminium to a whopping 50 per cent….Industry sources highlight that aluminium foil and can suppliers already faced a roughly 6% jump in material costs following the tariff increase, with projections of a 24% hike in can pricing by spring 2026. The Can Manufacturers Institute warned these tariffs distort domestic packaging supply and could push U.S. food prices higher.
Del Monte was already in trouble but it were the additional cost due to tariffs which finally broke its neck.
The U.S. economy will experience many unforeseen side effects from Trump's high tariffs. Del Monte won't be last to fall due to them.
As Trump continues like this I doubt that the Republicans will still own the House and the Senate after the 2026 midterm elections.
Posted by b on July 10, 2025 at 15:15 UTC | Permalink