For Brazil, replacing U.S. products has so far been relatively easy, with China increasingly filling the gap — and for another reason as well. With Chinese vehicles and auto parts also facing major trade barriers in the United States, China has shifted much of the attention it once devoted to the U.S. market toward South America. As a result, Brazil has been flooded with Chinese products, including fully assembled vehicles.

“There is absolutely no sense in these tariffs. As they impose additional tariffs on Brazilian products, U.S. industry will suffer,” Regiane Bressan, a professor of international relations at the University of São Paulo, told CNN.

The tire industry has been among the sectors most exposed to this trade turbulence. Many Brazilian factories export part of their production to the United States, where manufacturing in Brazil has traditionally offered cost advantages. With tariffs in place, the sector — dominated largely by companies with American and European roots — risks being squeezed. Making matters worse, Brazil has increasingly imported Chinese tires, which are considerably cheaper than those produced domestically.

Agricultural machinery is another sector feeling the effects of the tariffs. Brazil exports significant volumes of equipment and components to the United States, while the U.S. also ships substantial quantities of tractors and parts to Brazil. Both countries are agricultural powerhouses, meaning that the fallout from the trade dispute is likely to reach farmers and producers on both sides.

The trade war between the United States and Brazil makes little economic sense. The two countries are historic partners. For Trump, however, one obstacle is that Brazil does not currently have a president aligned with his political ideology, even though Brazilian President Luiz Inácio Lula da Silva has sought to engage Trump diplomatically this year. Those efforts have produced few direct results, as Trump has continued to press ahead with tariffs on Brazil. Politically, however, Lula may have benefited: his approval ratings have risen in recent polls.

Why? Because the more Washington imposes measures that many Brazilians view as unjustified, the stronger anti-U.S. sentiment becomes inside Brazil — a dynamic that can work in Lula’s favor.

Trump, for his part, has found support among Lula’s political opponents, particularly the movement led by the family of former president Jair Bolsonaro, who is currently imprisoned over his attempt to overturn the result of Brazil’s last presidential election — an episode that has drawn comparisons with Trump’s own efforts to challenge his defeat to Joe Biden. With Brazil approaching another election, the country is increasingly being flooded with misinformation while also facing growing pressure from the United States.

The question is how far Trump is willing to take this confrontation — and how long Brazil can withstand the pressure. Lula da Silva has approved a financial support package for companies affected by Trump’s tariffs, but Brazil is clearly the more vulnerable side and would struggle to sustain a prolonged confrontation with the United States. That is without even considering the enormous imbalance in military power should the dispute ever escalate beyond the economic sphere.

What is clear is that, for largely ideological reasons, both countries risk coming out of this worse off. So far, Brazil’s automotive market offers one of the clearest examples of the only major player benefiting from a trade dispute that makes little economic sense: China.