On July 9, Trump announced sweeping 50% tariffs on all Brazilian imports starting August 1. This was seen as a political retaliation against Lula’s efforts to de-dollarize trade and his refusal to drop charges against former Brazilian President Jair Bolsonaro. Brazil, South America’s largest economy with a GDP of $2.3 trillion, exports over $36 billion annually to the U.S.
Key industries targeted include coffee (17% of exports go to the U.S.), orange juice (42%), and Embraer aircraft (75% of revenue from North America). Embraer’s stock fell 8% after the tariff news. Economists warn that these tariffs could slash Brazil’s GDP by $20 billion by 2026 and cause price hikes for U.S. consumers.
In response, Brazil invoked its new reciprocity law, enabling counter-tariffs and potential restrictions on U.S. tech firms. Lula condemned the move as “unacceptable blackmail,” asserting Brazil’s sovereignty. Protests erupted across Brazil, with public support for Lula rising. Lula is not acting alone.
He’s pushing BRICS to move away from the dollar, proposing a common currency and promoting trade in local currencies. Over 40% of the global population and more than 25% of global GDP now reside within BRICS.
Brazil has already signed yuan-real swap deals with China, joined China’s alternative to SWIFT, and plans to issue renminbi-denominated “panda bonds.” The yuan now accounts for over 5% of Brazil’s foreign reserves.
At the 2025 BRICS summit in Rio, Brazil backed the launch of BRICS Pay and advocated a cross-border payments system. This poses a direct threat to U.S. financial supremacy. Trump has labeled Lula “soft on dictators” and fears Brazil may lead a Latin American revolt against dollar dependency.
Lula has also criticized the IMF and World Bank for keeping nations indebted to U.S. interests. Instead, Brazil is shifting its focus to the BRICS development bank. Wall Street is alarmed: analysts now warn of the “Lula Risk,” with Goldman Sachs and JPMorgan noting the dollar’s declining share in global reserves.
It is a statement that touches upon several concepts in psychology, particularly related to accountability, self-awareness, emotional regulation, and cognitive biases.
Here’s a breakdown of the connection:
Taking Personal Responsibility: Individuals who accept responsibility for their actions and understand the resulting consequences are more likely to learn from their mistakes and make better decisions in the future.
The Role of Self-Awareness: Being self-aware allows individuals to recognize their emotional triggers, including anger, and choose how to respond rather than react impulsively. Those with a strong sense of self-awareness are more likely to take ownership of their role in a situation.
Emotional Regulation: Effective emotional regulation involves managing and directing emotional responses with intention. Individuals who struggle with emotion regulation may be more prone to blaming others or getting angry at circumstances, even those they created.
Cognitive Biases: Certain cognitive biases, or flaws in thinking, can lead individuals to draw inaccurate conclusions, according to Healthline. Some people may project blame outwards as a defense mechanism to avoid feelings of guilt or shame. They might be unwilling to accept their role in creating negative outcomes, instead focusing on external factors or others’ actions.
This can be connected to the concept of an external locus of control, where individuals believe external forces determine their experiences and outcomes.
In summary, the statement highlights the contrast between those who react angrily to consequences they themselves created, and those who take accountability, regulate their emotions, and learn from their experiences