Tariff war: Brazilian President Silva warns Donald Trump, says – If you impose 50% tax, we will also charge 50% duty

New Delhi. After US President Donald Trump imposed 50% import duty on Brazil, a situation of trade war seems to be developing between the two countries. Just a day after Trump’s announcement, Brazilian President Lula da Silva has given a strict warning that if America imposes 50% tax on Brazil, then Brazil will also impose 50% tax.

Lula gave this statement to a Brazilian television channel and also made it clear that if needed, Brazil will also take this issue to the World Trade Organization (WTO). He said that we can demand an international investigation and get clarification on it. Along with this, President Lula also mentioned the Reciprocity Law passed by Brazil’s Parliament recently, which gives the country the legal right to retaliate. He reiterated, ‘The point is that we now have a reciprocity law.’

Why did Trump impose 50% tariff?
In fact, Donald Trump cited the ongoing legal proceedings against former President Jair Bolsonaro as the reason for imposing this duty on Brazil. Trump alleges that this is a political witch-hunt against Bolsonaro, who is facing trial for attempts to overturn the 2022 election results. Trump had said in his statement that the trade relations between the US and Brazil are one-sided, but Lula rejected this claim. In a separate statement issued yesterday, he said, ‘Trump’s statement that our relations are not based on equality is completely wrong.’

Tariffs will be implemented from August 1
These tariff rates proposed by Trump will come into effect from August 1. Although the White House had already planned to increase tariffs on several countries, it has been postponed by a month to give those countries a chance to respond and negotiate. On the other hand, after Trump’s decision to impose 50 percent tariff on Brazil, President Lula held an emergency meeting with the cabinet on Thursday morning and discussed the strategy of counter steps. After the meeting, his office confirmed that a study group is being formed which will analyze what action Brazil should take in response to this American decision.

Trump’s threat: If you increase, we will increase more
Trump has sent letters to countries like Brazil, Japan, Bangladesh and South Korea, warning that if they do not agree to a trade agreement with the US, tariffs will be increased against them as well. In the letter sent to President Lula, Trump wrote, ‘If you also decide to increase the tariff, then by the same percentage you increase, we will add that much to our 50%.’

Start of a possible trade war?
The bitter war of words between the two leaders and the economic warnings given to each other have created a situation of a potential trade war. Brazil is Latin America’s largest economy and the US is its major trading partner. In such a situation, this conflict can have a huge impact on international trade. Now all eyes are on August 1, when Trump’s tariffs will come into effect.