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Brazil brought this strong move on itself after deciding to deny visas to U.S. officials, stonewall a routine ambassador approval and rack up a pattern of diplomatic hostility that left Washington no choice but to respond. Lula just put Brazil in the same position that Hugo Chávez's Venezuela ended up in 2010; that's a dangerous neighborhood to pick voluntarily.
This is an act of extreme hostility with no legitimate justification, that amounts to an expulsion. It's outrageous that Trump administration is using Brazil's professional diplomatic corps as a pressure tool to blackmail the country ahead of its election in October. This is coercion plain and simple, and the U.S. owes the explanation here.
Expect further escalation in U.S.-Brazil relations in the lead-up to the October elections, as both sides hope confrontation serves their aims. Lula bets nationalism and a fight with Trump will boost his chances, while Trump firmly believes that the more pressure, the less likely the leftist leader is to win reelection.