Trump's 50% Brazil tariff stretches emergency powers already facing court challenge

President Donald Trump's politically charged new tariff threat — a blanket 50% duty on imports from Brazil — stretches an interpretation of his powers that is already facing a high-stakes court challenge.

Trump said in a letter Wednesday that he is imposing the massive new tariff at least partly in retaliation against Brazil's treatment of its former president, Jair Bolsonaro.

But to do so, he is citing a law that only grants him emergency economic powers in order to deal with certain foreign threats to the United States, a White House official told CNBC Thursday.

That same law — the International Emergency Economic Powers Act, or IEEPA — is at the center of an ongoing lawsuit over Trump's "reciprocal" tariffs that is currently before a federal appeals court.

Trump's lawyers say his invocation of the law to impose those tariffs was an appropriate move to address multiple national emergencies, including "America's exploding trade deficit."

The White House did not immediately respond to CNBC's questions about Trump's letter to Brazil, including how Bolsonaro's circumstances relate to Trump's stated authority under IEEPA.

While the latest levy on Brazilian imports may not have a direct impact on the lawsuit already underway, critics say it could further erode the administration's credibility as Trump pursues an aggressive trade agenda.

Trump's letter announcing the tariff on Brazil "takes abuse of power to a whole new level," said Sen. Tim Kaine, D-Va., in a statement Thursday.

Kaine vowed to "use all available means to block these latest job-killing tariffs."

Sen. Ron Wyden of Oregon, the top Democrat on the Senate Finance Committee, accused Trump of attempting to "sacrifice the economy to settle his own personal scores, and it is far outside his legal authority."

IEEPA gives the president some powers to deal with national emergencies stemming from "any unusual and extraordinary threat" that comes in whole or in large part from outside the U.S.

Trump previously cited IEEPA in early April, when he slapped 10% tariffs on nearly all other countries' imports, plus higher rates on dozens of individual nations. His April 2 executive order announcing those tariffs also formally declared a national emergency.

According to the order, foreign trade practices that "contribute to large and persistent annual United States goods trade deficits" have caused the loss of America's "industrial capacity" and "compromised military readiness."

Trump temporarily suspended the higher tariffs a week later, following a trading frenzy in global markets.

In late May, the U.S. Court of International Trade struck the reciprocal tariffs down, ruling that IEEPA did not authorize Trump to impose them.

The judges in that case found that Trump's assertion of "unbounded" tariff-making power "exceeds any tariff authority delegated to the President under IEEPA."

But in June, judges on the U.S. Court of Appeals for the Federal Circuit paused that decision from taking effect while the case is still pending.

"We'll have to see" if Trump's tariff letter to Brazil could factor into the appeal, said Ilya Somin, a law professor who is representing plaintiffs in the case against the Trump administration.

"For the moment, these new Brazil tariffs are not part of the case," Somin said in a phone interview.

But he added that the letter "further underscores the indefensible nature" of Trump's assertion that he has virtually "unreviewable discretion" on tariffs.

This week, Trump began a new strategy: firing off individual letters to world leaders that set new tariff rates on their countries' U.S. imports, starting Aug. 1.

The nearly two dozen letters sent so far include identical language complaining about trade policies that have created "persistent" and "unsustainable Trade Deficits against the United States."

"This Deficit is a major threat to our Economy and, indeed, our National Security!" they read.

But Trump's letter to Brazil takes things much further, by explicitly declaring that he is imposing tariffs because he opposes the recent political and legal developments in the country.

Trump specifically decried Brazil's treatment of Bolsonaro, who is facing trial over his role in an alleged coup to overturn his 2022 reelection loss.

"This Trial should not be taking place," Trump wrote in the letter to current President Luiz Inacio Lula da Silva. "It is a Witch Hunt that should end IMMEDIATELY!"

He said the 50% tariff was coming in part due to "Brazil's insidious attacks on Free Elections." He also alleged that the country has attacked the "fundamental Free Speech Rights of Americans," accusing Brazil's Supreme Court of unlawfully censoring U.S. social media platforms.

Trump also knocked Brazil's trade policies. Echoing his language from prior letters, Trump claimed that Brazil's persistent U.S. trade deficits pose a national security threat.

Except that Brazil is one of the few trading partners with whom the U.S. maintains a goods trade surplus, not a deficit.

That surplus totaled $7.4 billion in 2024, according to the Office of the U.S. Trade Representative.

"He's either lying or misinformed," Somin said of Trump's incorrect claim.

Somin also asserted, contra Trump and his lawyers, that the U.S. having trade deficits with its partners is not unusual and does not constitute an emergency.

So "it's particularly stupid when we actually have a trade surplus," he said.