THE NEW YORK TIMES: Brazil kept tight rein on Big Tech, Trump’s tariffs could change that

President Donald Trump’s use of painful tariffs against Brazil has so far not sprung his political ally Jair Bolsonaro from house arrest as he awaits trial on charges of plotting a coup.

But the levies appear to be having more success in opening doors for America’s Big Tech companies as they seek to influence the rules governing them.

The companies, which have been aggressively courting Trump, suddenly have new leverage in Brazil’s halls of power. Against a backdrop of a 50 per cent tax on key Brazilian products, the firms are being welcomed to meetings with Brazilian officials and justices of the Supreme Court, as new regulation is being shaped on everything from online speech to artificial intelligence, according to several people with knowledge of the matter.

“Everything seems to be part of ‘the deal,’” said Anupam Chander, a law and technology professor at Georgetown University. “What might have been seen as Brazilian domestic policy suddenly becomes part of a trade agenda.”

Trump has had less success using a 50 per cent tax on key Brazilian products as a bully pulpit to force the judicial branch to drop the case against Bolsonaro. The former Brazilian president falsely claimed that the last election was rigged to favour his rival, Luiz Inácio Lula da Silva.

Brazil has insisted that nobody can meddle in its judicial affairs, and the Supreme Court justice overseeing Bolsonaro’s case, Alexandre de Moraes, has not been swayed, even when the United States imposed on him some of the most drastic sanctions in its arsenal.

While Trump’s attempts to free the former president might be a long shot, he could have more success in nudging Brazil to change its rules on the tech sector The stakes are high on both sides: As Brazil’s second most important trade partner after China, the United States last year ran a $7.4 billion trade surplus with Brazil on about $92 billion in trade.

Trump’s main complaint is that Brazil’s regulation of social media platforms is censoring conservative voices and hurting US companies.

At first, Lula accused Trump of “blackmail” and vowed to double down on regulating and taxing tech companies. Then, last week, things changed. As the reality of the tariffs sank in and talks hit a stalemate, Brazil’s lead negotiator, Vice President Geraldo Alckmin, signaled that his country was ready to discuss the matter of Big Tech “to overcome this problem” of 50 per cent US levies on billions of dollars in Brazilian exports.

Brazil, a chronically online nation of 212 million, represents one of the biggest markets for technological companies outside the United States. But its yearslong fight against online falsehoods has put Brazil at odds with digital platforms, which argue that efforts to rein them in infringe on free speech.

“If Brazil makes strides in its regulation, it could inspire other countries,” said Francisco Brito Cruz, a law professor at the Brazilian Institute of Education, Development and Research in Brasília. “Brazil is seen as a threat in this sense.”

Brazil, led by the Supreme Court and Moraes, has taken some of the most aggressive steps of any country in tackling online misinformation, saying it undermines the country’s democracy.

Its Congress has tried to force companies to monitor and clean up their platforms, but bills have been stymied by right-wing opposition. In this vacuum, Moraes has stepped in, acting as perhaps the most effective check on Bolsonaro and his supporters and their claim that the election was stolen.

After Bolsonaro narrowly lost the 2022 vote, thousands of his supporters stormed government buildings, demanding that the military overturn the result. Moraes ordered social networks to block dozens of prominent accounts that questioned the election or that sympathized with the rioters, including some accounts belonging to federal lawmakers.

When Elon Musk ignored court requests last year to remove accounts from X, Moraes blocked the platform in Brazil and threatened to fine users who sidestepped his ban.

In Brazil, where memories of the military dictatorship still linger, many have praised Moraes for standing up to powerful tech companies. But others have accused him of going too far.

He has jailed people without trial for threats they made online, blocked news outlets from posting content critical of politicians and ordered the removal of popular social media accounts, while refusing to explain how they threatened democracy.

Brazil’s crusade against misinformation has drawn the ire of Trump, who imposed steep tariffs and accused Moraes of censorship. The US office of the trade representative also opened an investigation into the country’s regulation of tech companies.

The diplomatic crisis handed tech companies their best chance yet to sway a wide range of crucial regulation that the Brazilian government and Supreme Court are considering, and which will shape how tech companies operate in Latin America’s largest nation.

In an important example, Brazil’s top court decided in June that digital platforms could be held liable for posts that violate the country’s laws, like those relating to hate speech and attacks on democracy. Tech companies must also monitor sponsored content and take active steps to ensure their platforms are not breeding grounds for harmful posts.

Brazil’s Supreme Court is now weighing how and when the new rules, which echo some of the laws adopted by the European Union, will be applied.

The tech companies have long insisted that they should not be held accountable for what users say on their platforms. They view the new criteria as too vague and cumbersome, making it difficult to comply, according to André Giacchetta, a lawyer who has represented X and other social media platforms in Brazil.

“This created a scenario of huge uncertainty,” Giacchetta said. He said the rules were also a major and worrying departure from regulations adopted by most other countries. “Brazil has isolated itself from the rest of the world.”

But then Trump sent a letter to Brazil on July 9, threatening to impose punishing new tariffs. Since then, at least two technology companies have met with Supreme Court justices, according to two people with knowledge of the talks who insisted on anonymity to discuss sensitive matters.

A New York Times review of the court’s public agenda did not find any disclosure of the meetings, which were not previously reported. A spokesperson for the Supreme Court declined to comment.

A day before Trump made good on threats to impose the tariffs on Brazil, technology companies, including Google and Meta, met with Alckmin, the vice president. A representative for Commerce Secretary Howard Lutnick also joined remotely, according to Brazilian officials.

The gathering was intended to signal to the United States that Brazil was willing to engage with the tech sector, according to one government official who spoke anonymously in order to discuss the confidential talks.

The US tariffs were discussed and tech companies were asked about their regulatory concerns, according to two people who participated in the meeting.

After the meeting, the Brazilian government proposed a working group focused on regulation, innovation and investment opportunities for the tech sector, citing data centres as a possible area where the United States and Brazil could partner.

“This issue of regulating big tech and social media is being discussed worldwide,” Alckmin said afterward. “So, let’s learn. Where has it been implemented? What worked? What led to criticism? We shouldn’t rush into this.”

Google and Meta declined to comment on Trump’s tariffs or the meetings held with the Brazilian authorities. X could not be reached for comment.

Many in Brazil see the Bolsonaro case as central to preserving the nation’s democracy and say there is no wiggle room. The country must now decide whether, and how much, it is willing to dial back its tough stance on the tech companies in the hope of striking a truce with the United States.

If tech companies succeed in influencing Brazilian regulation, the tariffs could deliver a major, if quieter, victory for the American leader and his allies.

“It could be all about making an example of Brazil,” Brito said. “So everybody is watching how this plays out.”

This article originally appeared in The New York Times.

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