Trump threatens to impose 50% tariff on Brazil

Today’s agenda: Moët Hennessy’s sexual harassment case; US Federal Reserve independence; Madrid political crisis; and summer book picks

Good morning. Donald Trump has threatened to hit Brazil with tariffs of 50 per cent and accused it of attacking free speech and treating former president Jair Bolsonaro unfairly, in a significant escalation of tensions between the US and Latin America’s biggest economy.

What happened: In a letter posted to Truth Social yesterday, Trump said that the trial of Bolsonaro over an alleged coup plot was a “Witch Hunt that should end IMMEDIATELY!” He added that the tariff, to be effective from August 1, would be applied partly because of Brazil’s “insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans”. He also accused Brazil’s Supreme Court of issuing “hundreds of SECRET and UNLAWFUL Censorship Orders” against US social media platforms.

Brazil’s reaction: President Luiz Inácio Lula da Silva signalled his country was ready to respond using a law that enables Brasília to retaliate against trade barriers imposed on its exports. Brazil’s vice-president and trade minister Geraldo Alckmin said his country did not pose a problem for the US, adding that “the US does have a trade deficit, but it has a surplus with Brazil”. The real dropped 2.3 per cent against the US dollar while Bovespa share index futures were down 1.4 per cent.

What this means: The letter to Brazil comes as part of a broader barrage against 22 countries in recent days as the American president ratcheted up pressure on trading partners to strike deals or face levies. He also confirmed that a 50 per cent levy on copper would take effect on August 1. Mining entrepreneur Robert Friedland, the billionaire founder of Canada’s Ivanhoe Mines, welcomed the copper tariffs, hailing them as “obvious and intelligent” and arguing that domestic production of the metal was “fundamental to America’s national security”.

Read the full story on Trump’s latest trade war salvo.

Here’s what else we’re keeping tabs on today:

• Jamie Dimon: JPMorgan Chase’s chief executive will give a speech and take part in a Q&A at the Irish foreign ministry in Dublin.

• Pharma lawsuit: London’s Court of Appeal hears the next round in Pfizer and Moderna’s Covid-19 vaccine legal battle.

• Economic data: Germany releases consumer price index and harmonised index of consumer prices inflation rate figures.

• Results: Delta Air Lines, Severn Trent and Tata Consultancy Services are reporting earnings. Read the Week Ahead newsletter for the full list.

Five more top stories

1. Exclusive: Moët Hennessy is facing accusations of sexual harassment, gender discrimination and unfair dismissal in a lawsuit that people who have worked at the business say is symptomatic of wider cultural problems at LVMH’s €6bn drinks division. Adrienne Klasa has more details on the case.

2. US power providers are seeking to impose big price increases on consumers amid the energy-intensive requirements of artificial intelligence data centres. An energy advocacy group said utilities sought regulatory approval for 142 per cent higher rates in the first half of 2025, highlighting the question of whether surging electricity costs will be shared among all users, or charged directly to the large industrial customers driving the new demand.

• Anthropic: Amazon is weighing another multibillion-dollar investment in the AI model builder to act as a bulwark to the rival Microsoft-OpenAI tie-up.

• AI fighter jets: Europe is just a few years away from being able to deploy uncrewed flights, according to the continent’s most valuable defence start-up.

3. Grant Thornton’s UK and US businesses are vying to take over their German sister firm, in a private equity-fuelled race to secure a greater share of the accounting firm’s global network. People familiar with the matter said discussions over the German business could be replicated in similar deals, with affiliates in Spain and India also open to acquisition.

4. Carmakers and shipowners say Trump’s port fees will hurt American consumers and exporters. The call to rethink the steep new charges on car-carrying ships — a $14 “per net tonne” fee which is due to come into force on October 14 — came from the World Shipping Council and key US companies including Ford and Caterpillar.

5. A catastrophic flood that has killed more than 100 people in Texas has amplified concerns that countries are ill-prepared to warn citizens of impending dangers, even as climate change makes extreme weather events more frequent and intense. “It is particularly shocking and concerning that the flood was so deadly in a place that knows they are at risk of flash floods,” said a senior adviser at the Red Cross Red Crescent Climate Centre. 

Can Europe’s pharmaceutical companies unlock the full potential of real-world evidence, particularly in oncology? Sign up here to join industry leaders and regulators at a free online event today.

The Big Read

The US president has stepped up his criticism of Federal Reserve chair Jay Powell, prompting some to question how long the central bank can remain above politics.

​​We’re also reading and listening to . . . 

Chart of the day 

Dutch pension funds are set to put pressure on European government debt markets this year with the sale of around €125bn of long-dated bonds. It is the latest example of declining demand for long-term debt, which has helped push up yields and increased strains on policymakers as Europe increases borrowing to fund its defence and energy ambitions.

Take a break from the news

Join the FT’s books editors Frederick Studemann and Maria Crawford today for a virtual Q&A to help you find the perfect summer books. Leave a comment below the story, telling Fred and Maria briefly about what you like to read. They will mine nearly 30 categories of fiction and non-fiction to bring you a recommendation.