A Fire in the Backyard: How Trump Lit a Diplomatic Bonfire with Brazil

For decades Washington treated Latin America as its private yard. This week the yard caught fire—and the flames are coming from the region’s largest country.

In a matter of days, the United States and Brazil have lurched from the usual hemispheric bickering to open hostility. The spark? One tweet and a letter from Donald Trump. The fallout? Brazil’s president is now flirting with ditching the dollar, and crowds in São Paulo and Rio are burning U.S. flags.

The two sentences that shook the hemisphere

On Wednesday, President Luiz Inácio Lula da Silva—normally careful not to provoke Washington—dropped the diplomatic equivalent of a match on dry tinder.

First: “Brazil has no obligation to keep using the dollar in its trade.”
Translation: we can walk away from the greenback if pushed.

Second: “We can live without trade with the United States; we have other partners.”
Translation: don’t assume we need you more than you need us.

Coming from the leader of Latin America’s economic heavyweight, the remarks were unprecedented.

From courtroom drama to tariff war

Behind Lula’s anger is a domestic Brazilian story that spiraled into a bilateral crisis.

1. The coup that never was
   After losing the 2022 election, former president Jair Bolsonaro—often called the “Trump of the Tropics”—refused to concede. Prosecutors now say he and a handful of loyal officers plotted a January-style insurrection, complete with fake election-fraud claims and feelers to sympathetic generals.

   

   The scheme fizzled; Bolsonaro had retired as a mere captain, and old comrades weren’t willing to risk their careers. Brazilian police uncovered the evidence, and on 10 June Bolsonaro went on trial for attempted coup, criminal conspiracy, and damage to democratic institutions.
2. Trump rides to Bolsonaro’s defense
   Donald Trump, who shares both Bolsonaro’s politics and his evangelical base, erupted. First he threatened new tariffs on the entire BRICS bloc—this year’s summit is being hosted by Brazil—calling the group “anti-American.” Two days later he announced a 50 % tariff on Brazilian goods, justifying it as punishment for Lula’s “political persecution” of Bolsonaro.
3. Brazil hits back
   The reaction in Brasília was swift and furious.
   • The foreign ministry summoned the U.S. chargé d’affaires and handed the protest letter back unread.

   

   
   • Agriculture Minister Carlos Fávaro shrugged off the tariffs: Brazilian soy, beef, and iron ore can pivot from U.S. buyers to China, the Middle East, and South Asia.
   • Anti-Trump demonstrations erupted in major cities. Even some Bolsonaro supporters balked at siding with a foreign bully against their own courts.

Why Washington should worry

Brazil is no minor player. It is the Western Hemisphere’s second-largest country by population (215 million) and landmass (8.5 million km²). If Brasília decides to deepen ties with Beijing—or any outside power—the U.S. loses strategic depth in its own neighborhood.

Republican hawks who normally cheer Trump’s every tariff are privately uneasy. Hemispheric solidarity has always been America’s fallback; torching it over a defeated ally looks less like strength and more like self-sabotage.

The absurdity of the moment

Barely a month ago, the Trump White House announced “only” a 10 % tariff on Brazil. Now, without new negotiations, the number quintupled—justified by a domestic Brazilian court case. Last year Brazil actually ran a $7.4 billion trade deficit with the United States. By Trump’s own logic, Washington, not Brasília, is the “winner.”

Yet here we are. One tweet, one letter, and the backyard is ablaze—fueled by a former U.S. president and the wounded pride of a former Brazilian one.