Balance of Power

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Perhaps the most surprising thing about the public feud that erupted yesterday between Donald Trump and Luiz Inácio Lula da Silva is that it took so long to burst into the open.

Both men are free-wheeling, firebrand, near-octogenarian leaders who speak their minds. Neither has made much effort to hide his contempt for the other.

Trump’s threat to slap 50% tariffs on Brazil seems punitive, coming after his condemnation of the BRICS summit in Rio de Janeiro as “anti-American.” For Lula, it represents a crucial test.

WATCH: Trump to impose 50% tariff on Brazilian goods entering the US.

Brazil is no longer nearly as dependent on the US as it was, but it’s still a large export market — second only to China. The real sank almost 3% against the dollar on the news.

Any further market selloff would be another problem for Lula, who’s already struggling to manage a slowing economy and record-low popularity ahead of a 2026 election in which he plans to run again.

Lula won plaudits as a deft negotiator when he first took office in the early 2000s and could make diplomatic overtures to Trump. But in his third term, the left-wing leader has often proved irascible, reluctant to accept criticism or advice.

Some of his shrinking circle of trusted aides may see in Trump’s attacks a useful tool to rile up his base.

Even if he were to negotiate, it’s unclear what Lula could offer: The US already runs a trade surplus with Brazil.

Trump suggested the tariffs are partly retribution for Brazil’s targeting of US social media over hate speech and disinformation. He also called on Brazilian authorities to drop charges against his friend and Lula rival Jair Bolsonaro, who’s accused of a coup attempt.

Lula said Brazil won’t accept “any form of tutelage” and threatened to retaliate, spelling further escalation.

The question now is who blinks first. — Julia Leite

Leaders and foreign ministers at the BRICS Summit in Rio de Janeiro on Sunday. Photographer: Dado Galdieri/Bloomberg

Global Must Reads

India is trying to shield itself from Trump’s backlash against BRICS by stressing it has no plans to challenge the dollar’s global dominance, sources say, after the US leader threatened an additional 10% tariff on members of the emerging-markets bloc. Separately, Washington will begin levying a 50% duty on copper imports from Aug. 1, confirming a move that will hurt American producers of everything from automobiles to appliances.

Ukraine’s allies gathering in Rome today to discuss the nation’s postwar reconstruction are being forced to grapple with the reality that the prospect looks more remote than ever after Russia unleashed its latest deadly air strike on Kyiv. With Trump condemning Moscow’s refusal to discuss a ceasefire, US Secretary of State Marco Rubio is set to meet Russian Foreign Minister Sergei Lavrov during an ASEAN gathering in Malaysia today.

A police officer at the site of a Russian air strike that hit a building in Kyiv today. Photographer: Andrew Kravchenko/Bloomberg

A senior Israeli official played down the chances of an imminent end to the war in Gaza, even as Trump said negotiators were “very close” to a ceasefire. A truce with Hamas could be agreed to in a week or two but may not evolve into a de facto end to a war that’s lasted more than 21 months and destabilized the wider Middle East, according to the official.

Trump welcomed leaders of five West African nations, hailing the continent’s economic potential as his administration seeks to expand access to critical minerals and other natural resources. “We’re shifting from aid to trade,” Trump said. While Gabon, Guinea-Bissau, Liberia, Mauritania and Senegal rank among Africa’s smaller economies, they’re rich in minerals and have the potential to significantly ramp up production.

The UK and France will agree to strengthen cooperation on nuclear deterrence, formally declaring a willingness to coordinate any response to an extreme security threat in Europe. They will also order more of the conventionally armed Storm Shadow cruise missiles that they’ve supplied to Ukraine and boost efforts to develop a next-generation replacement for the weapons.

The eldest son of Silvio Berlusconi, the late Italian prime minister, hinted that he could potentially follow in his father’s footsteps and seek office. Pier Silvio Berlusconi is chief of Italy’s largest commercial broadcaster, MFE-MediaForEurope, founded by his father in the late 1970s.

Pier Silvio Berlusconi. Photographer: Miguel Medina/AFP/Getty Images

French police raided the headquarters of the far-right National Rally yesterday in an investigation into suspicions of unlawful funding of its latest presidential campaign, a move the party’s head immediately branded as “harassment.”

Malaysia’s Attorney General confirmed for the first time the existence of a document that former premier Najib Razak says would allow him to serve the rest of his jail term for corruption under house arrest, local media reported.

The Trump administration is intensifying its fight against Harvard University, warning that its accreditation may be in danger and formally moving to subpoena the school in a bid for information on foreign students.

Supporters of Palestine gather at Harvard University on Oct. 14, 2023. Photographer: Joseph Prezioso/AFP/Getty Images

On the latest episode of the Trumponomics podcast, we explore how the attack by Trump’s “Big Beautiful Bill” on renewable energy may push up electricity bills and damage US competitiveness in AI. Listen on Apple, Spotify, or wherever you get your podcasts.

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Chart of the Day

Nvidia became the first company to achieve a $4 trillion market valuation, marking a stunning rebound for the computing systems maker following a rough start to the year. The stock has risen more than 20% in 2025, and is up more than 1,000% since the beginning of 2023, accounting for 7.5% of the S&P 500 Index. The latest catalyst has been a commitment to AI spending from some of Nvidia’s biggest customers, including Microsoft, Meta, Amazon and Alphabet.

And Finally

As European nations invest hundreds of billions of dollars to bolster their armed forces, the rush to rebuild militaries that have shrunk over decades of underinvestment has exposed a major challenge. Almost without exception, they face significant shortfalls in personnel as demographic change, economic factors and long-term shifts in attitudes toward service impact their ability to recruit soldiers. Some governments are raising wages and trying to invoke a sense of crisis or patriotic duty. Others have reinstated or extended the draft. Read our feature about Europe’s citizen soldiers here.

Army reservists and instructor in firing training on the base of the 19th army engineer regiment in France. Photographer: Cyril Marcilhacy/Bloomberg

Global Must Reads

Chart of the Day

And Finally

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