The US Escalates Its Assault on Brazil's Free-to-Use (for Citizens and Micro Businesses) Digital Payments System | naked capitalism

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"[F]ew things have provoked more outrage [in Brazil] than Trump’s attack on PIX, the country’s beloved instant-payment system."

The Trump administration is trying to rebuild the tariff wall that was knocked down last year by the US Supreme Court. This time it is using Section 301 of US trade law, which allows the government, via the Office of the United States Trade Representative (USTR), to investigate and punish foreign countries whose trade policies are deemed to be unfair.

One of the first countries targeted was Brazil, which last Wednesday became the subject of additional 25% tariffs on exports of over 3,000 products to the US, including sugar, clothing and machinery.

The move comes just weeks before the beginning of Brazil’s presidential campaign that will pit incumbent President Luiz Inácio Lula da Silva against Flávio Bolsonaro, son of far-right former President Jair Bolsonaro. The Trump administration has trotted out a surfeit of reasons for the tariffs, from springing Jair Bolsonaro from jail, to scrapping Brazilian tariffs on US ethanol, to Amazon deforestation (as if they cared…), to turfing Chinese companies out of Brazil.

Trade between Brazil and China reached a record $171 billion in 2025, more than double Brazil’s $83 billion in trade with the US. Washington would like nothing more than to see a US client government installed in Brasília that will pull the country out of China’s orbit and secure its resources for US capital, as appears to have already happened in Colombia, Chile and Peru.

That said, the biggest driver behind the move appears to be another issue entirely: Brazil’s publicly controlled digital payments system, Pix, which is leaving the global payment duopoly, VISA and Mastercard, and US tech giants increasingly out of the equation. The system, launched in 2020, allows almost instant money transfers between people, companies and government entities 24 hours a day, seven days a week, from any device with an internet connection.

Brazil and US clash over future of payments as popular Pix system stirs global interest https://t.co/ODw63aDF0t https://t.co/ODw63aDF0t

— Reuters (@Reuters) July 21, 2026

In the tweet below, the USTR claims that since the launch of Pix, the country’s central bank "has acted as a regulator to disadvantage US electronic payments services providers and preference its national champion Pix":

The Brazilian central bank encourages use of Pix over other services by mandating that participating institutions offer Pix for free to individuals and by capping the fee those institutions may charge businesses for Pix transactions.

Electronic Payment Services: In November 2020, the Brazilian central bank established the instant payment system Pix, and the bank has acted as a regulator to disadvantage U.S. electronic payment services providers and preference its national champion Pix.

The Brazilian central…

— United States Trade Representative (@USTradeRep) July 16, 2026

In other words, the US Trade Representative is imposing additional tariffs on Brazil because its government and central bank are preventing US banks and financial companies from engaging in fee gouging on its publicly run payments system. According to the USTR’s arguments, these entities are being forced to offer access to the payment system on the main screen of their mobile apps and are banned from charging commissions to individuals for using the service.

Some more background from the Wall Street Journal:

[F]ew things have provoked more outrage here than Trump’s attack on PIX, the country’s beloved instant-payment system that Washington cited as a key justification for its...