Notes

The things you can do with tariffs. U.S. President Donald Trump announced 50 percent tariffs on Brazil this week—for reasons that had nothing to do with trade. In his letter to the Brazilian president, Luiz Inácio Lula da Silva, Trump explicitly cited his anger over the prosecution of Lula’s predecessor, Jair Bolsonaro, calling it a “Witch Hunt that should end IMMEDIATELY!”

It’s a new frontier in trade weaponization—using economic policy to intervene in another country’s judicial proceedings. The economist Paul Krugman called the move “grotesquely illegal”—noting that among other issues the move raises, “not liking what a country’s judicial system” is doing violates international trade law.

But here’s where things got even more curious: Trump simultaneously exempted nearly 700 Brazilian products from the tariffs, including airplanes, iron ore, aluminum, natural gas, orange juice, fertilizers, petroleum, and lumber. Brazilians responded by adopting the mocking acronym “TACO”: Trump Always Chickens Out. And there are certainly at least similar patterns with other countries: 30 percent tariffs on Mexico and the EU starting August 1—but with goods covered by the  United States-Mexico-Canada Agreement, the trade deal that replaced NAFTA, still exempt.

What is he doing?