Trump's tariffs are a boon for Brazil and Mexico's left-wing leaders
Two new polls show that Brazil's President Luiz Inácio Lula da Silva's popularity has rebounded for the first time this year since Trump announced a 50% tariff on Brazilian goods starting Aug.1.
A July 16 Quaest poll shows 43% of Brazilians approve of Lula's government, up from 40% in May. Lula's popularity began to rebound after Trump announced his first round of tariff threats in March.
A separate poll by Atlas/Bloomberg released last week shows 49.7% of Brazilians approve of Lula's job performance, a 2.4-point increase since June.
'The Trump tariffs have helped Lula,' Anthony Pereira, a Brazil expert at Florida International University, told me. 'It makes him look as he's defending sovereignty. And among the educated middle class, people feel he's taking the right position.'
It's too early to say whether Lula's poll surge will last long enough to make him a viable candidate for a 2026 re-election run, but U.S. tariffs have given him some breathing room.
Until recently, few believed Lula would run in next year's election. Brazil's economy is expected to grow just 2.3% this year, down from 3.4% last year, according to the International Monetary Fund. That's far below Brazil's economic expansion during the commodity boom of Lula's previous governments in the early 2000s.
Now, there is growing speculation that Lula will ride a wave of nationalist sentiment into a re-election bid.
'This looks like a lighter version of what happened in Canada and Australia, where a 'Trump effect' helped center-left parties come from behind and win,' Pereira says.
Trump's July 9 letter threatening more tariffs on Brazil criticized the Brazilian justice system for prosecuting his close ally, former right-wing President Jair Bolsonaro. The former Brazilian leader faces charges of plotting a coup to block Lula's 2022 election victory.
Many Brazilians saw Trump's use of tariff threats to demand Bolsonaro's exoneration as a gross interference in their country's internal affairs. Lula said, 'Brazil is a sovereign nation with independent institutions and will not accept any form of tutelage.'
According to the latest Quaest poll, 72% of Brazilians said Trump was wrong in linking his tariffs to the charges against Bolsonaro. Only 19% said the U.S. president was right.
In Mexico, President Claudia Sheinbaum has faced an increasingly stagnant economy and backlash over a controversial judicial reform. But Trump's tariff threats on Mexican goods have given her new political oxygen.
Since Trump's first 25% tariff threat to Mexico in March, accusing Mexico of failing to stop migrants and fentanyl at the border, Sheinbaum's poll numbers have stayed strong, holding near 70% despite worsening economic news.
Mexico's economy is expected to grow a paltry 0.1% this year — almost nothing. And Sheinbaum's push for the judicial reform she inherited has dangerously weakened the judiciary's independence and Mexico's democracy.
But today, much of the criticism over Sheinbaum's performance has been drowned out by headlines about Trump's tariffs.
Even conservative business leaders and journalists have praised Sheinbaum's firm but calm response to Trump's bullying. 'Mexico must be respected,' she has repeatedly said, urging the Trump team to negotiate a mutually beneficial tariff deal.
In both Brazil and Mexico, many centrist and right-of-center opposition leaders say, rightly, that instead of attacking America's neighbors and trade partners, Trump should focus on his true rival: China.
Even some hard-line former top Trump aides agree that the United States should embrace economic integration with Latin America to better compete with China rather than engaging in trade wars with the region.
'The main problem in today's international trade is China,' Trump's former National Security Adviser John Bolton told me.
If Trump had united with other nations victimized by China's theft of intellectual property and protectionism, 'we would have much greater chance at affecting China's behavior than for the U.S. to declare a trade war against everybody,' Bolton told me.
As for Mexico and Brazil, Bolton said Washington should help U.S. manufacturers move factories to Latin America, which would be a win-win for the entire hemisphere. But unfortunately, Trump doesn't get it, and his trade war 'will cause everybody, including the United States, a lot of unnecessary pain,' Bolton said.
I agree. Trump's tariff threats on Brazilian and Mexico won't just make tomatoes, coffee and cars pricier for Americans, but will hand Latin America's populists a political lifeline. Ironically, an American president who claims to be a champion of the fight against the left may be fueling its revival south of the border.
Don't miss the 'Oppenheimer Presenta' TV show on Sundays at 9 pm E.T. on CNN en Español. Blog: andresoppenheimer.com
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Lula's Defiance Pays Off as Trump Blinks on Brazil Tariffs
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It came as a shock to a Brazilian administration that had limited contact with the White House in recent weeks, instead relying on a cadre of business leaders, including the head of plane-maker Embraer SA, to plead Brazil's case in Washington. The leftist Lula had also held firm against US pressure to interfere in the judicial system and halt the prosecution of right-wing former President Jair Bolsonaro. Lula has no power over the top court and his decision to defend it seemed to turn the tariff hikes into an inevitability. Instead, Trump blinked, announcing for the first time that his 50% tariff didn't mean 50% on everything. The clash with Trump has given Lula a popularity boost significant enough to tip the scales in his favor: just over 50% of Brazilians now approve of him, up from 49.7% two weeks earlier, according to LatAm Pulse, a survey conducted by AtlasIntel for Bloomberg News and published Thursday. Now, Lula's challenge is to turn the reprieve into a longer-lasting détente with his nation's second-largest trading partner. Bolsonaro's upcoming trial on charges he attempted a coup threaten to further inflame Trump, who could easily remove exemptions. Brazilian officials worry that the US's move to sanction Supreme Court Justice Alexandre de Moraes — announced mere hours before the tariff order was published — could lead to punitive measures against other public officials. Plus, key sectors that weren't exempted from the 50% tariff, including coffee and beef, may need economic assistance to help Lula buy time and goodwill among Brazilians as he keeps holding his ground against the much larger economy to his north. Brazil's central bank held interest rates steady on Wednesday, with policymakers planning to keep the benchmark Selic on hold in the face of above-target inflation and the looming threat of levies. Still, Lula declared a cautious victory. 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He reiterated Lula's message that Brazil would negotiate over tariffs but not its sovereignty, he told reporters. Back in Brasilia, Lula learned of the new order from Brazil's embassy in Washington and immediately summoned Alckmin and other officials for an emergency meeting, according to two officials familiar with the proceedings. The government had been working on plans to help businesses and key sectors mitigate the impact of higher tariffs, which Bloomberg Economics estimated could deliver a 1% hit to Brazil's economy. But its sense now was that while it remained at risk, the threat was no longer so dire, the people said. The government has put the release of the plans on hold while it revises them and pursues new talks with the US, one of the officials said. 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'Chief Tariff Officer' Brazilian companies that had expected to face the brunt of the tariffs also expressed optimism. For weeks, major firms with a significant US presence had warned the Trump administration that such high tariffs would hit the American economy hard. Among them was Embraer, the world's third-largest plane-maker, which boasts more than 2,000 US employees and has pushed for an exemption similar to the one Trump had granted the European Union. In recent days, Embraer CEO Francisco Gomes Neto has been so involved in negotiations that he has jokingly referred to himself as the company's 'CTO' — or Chief Tariff Officer — in private conversations, according to multiple people familiar with the situation. 'The news confirms the positive impact and strategic importance of Embraer's activities for the Brazilian and US economies,' it said in a statement. The company's shares rose 11%. 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AP reports: Read more here. EU wine, spirits to face 15% US tariff from August 1: EU official Reuters reports: Read more here. Reuters reports: Read more here. Trump tariff surprise triggers implosion of massive copper trade Bloomberg reports: The global copper market is reeling from its biggest shock yet in a year of policy surprises, violent price swings and unprecedented trade dislocation. President Donald Trump went ahead with 50% tariffs on copper imports, but exempted refined metals that are the mainstay of international trading. The move triggered a record plunge for US prices, after an unprecedented period of fat profits for traders who hurried metal to America before the levies kicked in. A large premium for New York futures over London evaporated. 'This has badly deviated from market expectations,' said Li Xuezhi, head of research at Chaos Ternary Futures Co., a unit of a commodities hedge fund in Shanghai. 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Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them. Oh' Canada!!!," Trump wrote on Truth social. The US has inked a deal with at least one other country backing Palestinian statehood — the UK, whose prime minister, Kier Starmer, said this week it would recognize and support Palestinian statehood from September 2025. Bloomberg News reports: Read more here. President Trump hit out at Canada on Thursday, saying its support for Palestinian statehood would make it harder to strike a trade deal with the US's neighbor. "Wow! Canada has just announced that it is backing statehood for Palestine. That will make it very hard for us to make a Trade Deal with them. Oh' Canada!!!," Trump wrote on Truth social. The US has inked a deal with at least one other country backing Palestinian statehood — the UK, whose prime minister, Kier Starmer, said this week it would recognize and support Palestinian statehood from September 2025. Bloomberg News reports: Read more here. US sets Korea tariff rate at 15% in deal with key supplier The US announced on Wednesday that it had reached a trade deal with South Korea that will impose a 15% tariff on imports, including autos and sets up a major investment in American energy and shipbuilding. President Trump announced the deal on Truth Social writing that a "full and complete trade deal" had been reached. "I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea. The Deal is that South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, as President," Trump wrote. "Additionally, South Korea will purchase $100 Billion Dollars of LNG, or other Energy products and, further, South Korea has agreed to invest a large sum of money for their Investment purposes." Bloomberg News reports: Read more here. The US announced on Wednesday that it had reached a trade deal with South Korea that will impose a 15% tariff on imports, including autos and sets up a major investment in American energy and shipbuilding. President Trump announced the deal on Truth Social writing that a "full and complete trade deal" had been reached. "I am pleased to announce that the United States of America has agreed to a Full and Complete Trade Deal with the Republic of Korea. The Deal is that South Korea will give to the United States $350 Billion Dollars for Investments owned and controlled by the United States, and selected by myself, as President," Trump wrote. "Additionally, South Korea will purchase $100 Billion Dollars of LNG, or other Energy products and, further, South Korea has agreed to invest a large sum of money for their Investment purposes." Bloomberg News reports: Read more here. Trump says US has reached trade deal with Pakistan President Trump on Wednesday said the US reached a trade deal with Pakistan that will see the US work with the nation to develop its "massive" oil reserves. Trump wrote on Truth Social: Pakistan's goods faced a 29% tariff under Trump's "Liberation Day" tariffs. Trump didn't specify a new tariff rate. The apparent agreement comes the same day that Trump ratcheted up tensions with India, with whom Pakistan has long had geopolitical tensions. Trump threatened 25% tariffs on India's imports to the US, plus an additional penalty for what he said was the country's cozy ties with Russia. President Trump on Wednesday said the US reached a trade deal with Pakistan that will see the US work with the nation to develop its "massive" oil reserves. Trump wrote on Truth Social: Pakistan's goods faced a 29% tariff under Trump's "Liberation Day" tariffs. Trump didn't specify a new tariff rate. The apparent agreement comes the same day that Trump ratcheted up tensions with India, with whom Pakistan has long had geopolitical tensions. Trump threatened 25% tariffs on India's imports to the US, plus an additional penalty for what he said was the country's cozy ties with Russia. Powell on tariff-related price increases: Companies will 'cross the street in a group' Federal Reserve Chair Jerome Powell said on Wednesday that the central bank is seeing the "early beginnings" of tariff inflation on goods. "They'll cross the street in a group," Powell said of companies raising prices together, citing as an example the price hikes on both washing machines and dryers that occurred during the first Trump administration, even though only washing machine imports faced higher tariffs. Powell's comments echoed some of what we've heard from companies so far this earnings season. While companies haven't hiked prices across the board, some with businesses most exposed to President Trump's tariffs have noted that they will raise prices to protect margins and offset higher costs. Procter & Gamble (PG), for instance, said on Tuesday it would raise prices by about 2.5% across its portfolio. Mondelez (MDLZ) also said it plans to raise prices, though with a "surgical" approach amid some signs of consumer stress. And L'Oréal affirmed plans to raise prices to offset higher costs from tariffs. Graco Inc. (GGG), a Minneapolis-based industrial equipment manufacturer, said it waited to see what its competitors did on price before taking a price increase. "That gave us the opportunity and the confidence to know that we could also do the same thing," CEO Mark Sheahan said. Read more live coverage of corporate earnings. Federal Reserve Chair Jerome Powell said on Wednesday that the central bank is seeing the "early beginnings" of tariff inflation on goods. "They'll cross the street in a group," Powell said of companies raising prices together, citing as an example the price hikes on both washing machines and dryers that occurred during the first Trump administration, even though only washing machine imports faced higher tariffs. Powell's comments echoed some of what we've heard from companies so far this earnings season. While companies haven't hiked prices across the board, some with businesses most exposed to President Trump's tariffs have noted that they will raise prices to protect margins and offset higher costs. Procter & Gamble (PG), for instance, said on Tuesday it would raise prices by about 2.5% across its portfolio. Mondelez (MDLZ) also said it plans to raise prices, though with a "surgical" approach amid some signs of consumer stress. And L'Oréal affirmed plans to raise prices to offset higher costs from tariffs. Graco Inc. (GGG), a Minneapolis-based industrial equipment manufacturer, said it waited to see what its competitors did on price before taking a price increase. "That gave us the opportunity and the confidence to know that we could also do the same thing," CEO Mark Sheahan said. Read more live coverage of corporate earnings. Trump ends tariff break for low-value goods in blow to online retailers President Trump is ending a policy that spared lower-value goods from being impacted by tariffs. The policy will come to an end in late August and will impact goods valued at less than $800. Bloomberg reports: Read more here from Bloomberg. President Trump is ending a policy that spared lower-value goods from being impacted by tariffs. The policy will come to an end in late August and will impact goods valued at less than $800. Bloomberg reports: Read more here from Bloomberg. Trump signs order to justify 50% tariffs on Brazil President Trump has imposed 50% tariffs on Brazil by citing a 1977 law that revolves around the prosecution of former President Jair Bolsonaro. AP reports: Read more here. President Trump has imposed 50% tariffs on Brazil by citing a 1977 law that revolves around the prosecution of former President Jair Bolsonaro. AP reports: Read more here. Fed's Powell speaks on tariff effects on inflation: 'It doesn't feel like we're very close to the end' Fed Chair Jerome Powell said on Wednesday that increased tariffs are beginning to push up inflation in some categories, but longer-term inflation expectations remain anchored around the central bank's 2% goal. "Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen," Powell said in a press conference after the Federal Reserve held interest rates steady. Powell reiterated that central bank policymakers remain in wait-and-see mode. Though two policymakers dissented during the FOMC's meeting for the first time since 1993, as the effects of President Trump's tariff policies have divided central banker. 'It's been a very dynamic time for these trade negotiations, and lots and lots of events in the intermeeting period," Powell continued. "But we're still, you know, a ways away from seeing where things settle down." "It doesn't feel like we're very close to the end of that [trade negotiation] process, and that's not for us to judge, but it feels like there's much more to come." Fed Chair Jerome Powell said on Wednesday that increased tariffs are beginning to push up inflation in some categories, but longer-term inflation expectations remain anchored around the central bank's 2% goal. "Higher tariffs have begun to show through more clearly to prices of some goods, but their overall effects on economic activity and inflation remain to be seen," Powell said in a press conference after the Federal Reserve held interest rates steady. Powell reiterated that central bank policymakers remain in wait-and-see mode. Though two policymakers dissented during the FOMC's meeting for the first time since 1993, as the effects of President Trump's tariff policies have divided central banker. 'It's been a very dynamic time for these trade negotiations, and lots and lots of events in the intermeeting period," Powell continued. "But we're still, you know, a ways away from seeing where things settle down." "It doesn't feel like we're very close to the end of that [trade negotiation] process, and that's not for us to judge, but it feels like there's much more to come." Trump administration announces 50% tariffs on some copper imports President Trump signed a proclamation on Wednesday to impose 50% tariffs on certain copper imports starting Aug. 1. According to a White House fact sheet, "The Proclamation imposes universal 50% tariffs on imports of semi-finished copper products (such as copper pipes, wires, rods, sheets, and tubes) and copper-intensive derivative products (such as pipe fittings, cables, connectors, and electrical components), effective August 1." The measure came after a US investigation under Section 323, which US President Donald Trump ordered in February. The tariffs do not apply to the copper content of a product and they do not stack with auto 232 tariffs. Copper input materials (such as copper ores, concentrates, mattes, cathodes, and anodes) and copper scrap are also exempt from the measure. Read more here from Reuters. President Trump signed a proclamation on Wednesday to impose 50% tariffs on certain copper imports starting Aug. 1. According to a White House fact sheet, "The Proclamation imposes universal 50% tariffs on imports of semi-finished copper products (such as copper pipes, wires, rods, sheets, and tubes) and copper-intensive derivative products (such as pipe fittings, cables, connectors, and electrical components), effective August 1." The measure came after a US investigation under Section 323, which US President Donald Trump ordered in February. The tariffs do not apply to the copper content of a product and they do not stack with auto 232 tariffs. Copper input materials (such as copper ores, concentrates, mattes, cathodes, and anodes) and copper scrap are also exempt from the measure. Read more here from Reuters. Trump's trade deals come with few details to flesh out big numbers President Trump has announced a flurry of trade agreements, but many so far are proving light on detail, with key aspects still under negotiation, partners giving mixed signals about what they signed up for, and big numbers shrinking under scrutiny. Bloomberg reports: Read more here. President Trump has announced a flurry of trade agreements, but many so far are proving light on detail, with key aspects still under negotiation, partners giving mixed signals about what they signed up for, and big numbers shrinking under scrutiny. Bloomberg reports: Read more here. Hershey grows optimistic about cocoa tariff exemption as the company cuts guidance Hershey (HSY) is hoping for a Trump administration reprieve on tariffs as rising cocoa prices weigh on its full-year outlook. "I would say that we are even more optimistic now," Hershey CEO Michele Buck said on the company's earnings call. "As we've had conversations over the past several months, we have become increasingly comfortable that the government administration understands some of our concerns about the fact that cocoa can only be grown and sourced outside of the US." Buck cited comments from Commerce Secretary Howard Lutnick in recent days that left the door open for an exemption for cocoa products. "If you grow something and we don't grow it, that can come in for zero [tariffs]," Lutnick said on CNBC's Squawk Box on Tuesday. "So if we do a deal with a country that grows mangos, pineapple, then they can come in without a tariff. ... Coffee and cocoa will be other examples of natural resources," Lutnick added. Hershey plans to raise prices, though Buck stated that the price increases "had nothing to do with tariffs." For the year, Hershey expects to see a $170 million to $180 million cost headwind from tariffs. "We'll continue to press on tariffs relative to the cocoa exemption," Buck said, adding: "That's sort of out of our control, but [we] continue to lean there." Hershey (HSY) is hoping for a Trump administration reprieve on tariffs as rising cocoa prices weigh on its full-year outlook. "I would say that we are even more optimistic now," Hershey CEO Michele Buck said on the company's earnings call. "As we've had conversations over the past several months, we have become increasingly comfortable that the government administration understands some of our concerns about the fact that cocoa can only be grown and sourced outside of the US." Buck cited comments from Commerce Secretary Howard Lutnick in recent days that left the door open for an exemption for cocoa products. "If you grow something and we don't grow it, that can come in for zero [tariffs]," Lutnick said on CNBC's Squawk Box on Tuesday. "So if we do a deal with a country that grows mangos, pineapple, then they can come in without a tariff. ... Coffee and cocoa will be other examples of natural resources," Lutnick added. Hershey plans to raise prices, though Buck stated that the price increases "had nothing to do with tariffs." For the year, Hershey expects to see a $170 million to $180 million cost headwind from tariffs. "We'll continue to press on tariffs relative to the cocoa exemption," Buck said, adding: "That's sort of out of our control, but [we] continue to lean there." India-US trade talks go off rails on row over farm markets Indian officials were initially confident of a trade agreement with the US, but now negotiations appear complicated by the US's announcement that it will impose a 25% tariff on Indian goods starting Aug. 1. India's high tariffs and non-monetary trade barriers remain sticking points, especially concerning agriculture. India imposes an average most-favored-nation tariff of 39% on imported farm goods, compared to 5% in the US. Reuters breaks down some of the key issues in focus: Read more here. Indian officials were initially confident of a trade agreement with the US, but now negotiations appear complicated by the US's announcement that it will impose a 25% tariff on Indian goods starting Aug. 1. India's high tariffs and non-monetary trade barriers remain sticking points, especially concerning agriculture. India imposes an average most-favored-nation tariff of 39% on imported farm goods, compared to 5% in the US. Reuters breaks down some of the key issues in focus: Read more here. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
The Hill
12 minutes ago
- The Hill
We can't just let states go rogue and redistrict more than once a decade
Consider this a call to state reason. Here in Maryland, I am introducing legislation to automatically redraw our state's eight congressional districts if and only if another state breaks from our shared norms and chooses to redraw their lines more than once this decade. Texas and others are currently threatening to do so — even though they, Maryland and other states have already redrawn their U.S. House districts for this decade based on the 2020 U.S. Census. If these states are allowed to change the rules and districts in the middle of the coming election, the remaining states will be forced to counter this blatant power grab. Even if it takes states years to implement a response, a strong response must be offered to disincentivize such conduct now and in future election cycles. But I still hope we can all step back from the brink. Indeed, Texas leaders ran this play once before, in 2003, when they drew and re-drew congressional districts until they got the result they wanted. Georgia followed suit soon after, but the rest of the states looked on quietly as this questionable, anomalous behavior played out in that decade. Now, as we watch history repeat itself two decades later, we cannot again allow states to go rogue and form a lasting precedent for re-drawing congressional districts whenever they want. Since each state draws its own lines to elect its members of Congress, we at least need parity on this fundamental question of how often a state can redraw its share of the combined 435-member House of Representatives. Parity — and predictability — on these basic ground rules is essential to the integrity of our shared democracy. Fairness dictates either that all states should redistrict whenever they want, or that none should do so. The reasonable choice is the latter. It should be obvious that subjecting the public — and Congress itself — to endless redistricting should be avoided. Unfortunately, this is not obvious to President Trump. He is attempting to rig the system and is publicly encouraging efforts to make state officials to 'find' votes for him in Congress. Amid plummeting approval ratings, Trump's strategy this time around is asking state leaders to keep redrawing the lines of their state's U.S. House districts until he gets the election results he wants. The last time the president needed help 'finding' votes, numerous state leaders dared to say no. We need that same courage now. Meanwhile, there is another, better way forward. States can choose reason by adopting an interstate compact to govern redistricting — at least on this question of how often they are allowed to redistrict. I urge states to adopt such a treaty until Congress puts these ground rules into federal law or the courts see fit to step in and properly referee for our fragile democracy. But again, I hope state leaders can all quickly step back from the brink. With any luck, my legislation and call to action will be moot, and states will stick with the norm of only drawing new congressional districts one time after the decennial census. But if rogue states repeat their history of trying to one-up their fellow American states, the other states must unfortunately respond in kind this time. Hopefully, that coming spiral will give members in both parties the courage of reason to end this race to the bottom.
