Brazilian President Luis Inacio Lula da Silva criticized the Trump administration's approach to global trade on Thursday, saying that globally announced tariffs on global automobile imports are likely to harm all the economies involved.
“This protectionism will not help any nation in the world,” Lula added through an interpreter that President Trump is the leader of America, not the world.
On Wednesday, Trump announced a 25% tariff on imports of foreign-made vehicles in the latest escalation of a trade war with other countries. He said the tariffs will come into effect on April 2 and will apply to “all cars not made in the US.”
Although parts made in the US are not subject to customs duties, many US-made cars are built with parts that cross the US border multiple times before they are finally assembled.
Trump argued that tariffs would encourage foreign car producers to move production to the US, boosting employment in the long run. However, tariffs can increase the cost of a manufacturer for bringing in certain parts, which can lead to higher prices for cars in the meantime.
“I think most of the time you'll be leading the car in one place,” Trump said Wednesday.
Lula expressed concern about the outcome of the US strategy. He warned that American consumers who have to pay a higher price for cars are likely to feel the impact of the new tariffs. That could possibly exacerbate inflation and lead to higher interest rates, Lula said.
“I'm very concerned about the US government's actions,” Lula said Thursday.
He added through an interpreter: “I'm worried because free trade is being harmed. I'm worried because multilateralism is weakening.”
The Brazilian president made his remarks at the end of his four-day trip to Japan. Japan is a major manufacturer of automotive parts, with the US being its biggest customer.
Lula and the Japanese Prime Minister on Wednesday agreed to strengthen partnerships with the country on trade, economy and security.
The Associated Press contributed to the reporting.
