Donald Trump’s threat to impose 50% tariffs on Brazilian goods sent the country’s currency plunging as the U.S. leader sharply escalated a dispute with Latin America’s largest nation and leftist leader Luiz Inacio Lula da Silva.

In a letter posted to his social media account, Trump said he was making the change “due in part to Brazil’s insidious attacks on Free Elections, and the fundamental Free Speech Rights of Americans.”

The Brazilian real slumped as much as 2.9% against the U.S. dollar on the back of the announcement, while the $5.35 billion iShares MSCI Brazil ETF — the largest U.S.-listed exchange-traded fund tracking the nation’s equities — was down as much as 1.9% in postmarket trading.

Brazil had been set to face the minimum 10% levy under the so-called “reciprocal” tariffs Trump originally unveiled in April. The letter was the latest of more than 20 notices posted by Trump in recent days, the first substantial upward revision from previously announced rates, and the first sent to a country that hadn’t already been a target for an increase — suggesting particular frustration on the part of Trump.

Such a high tariff could cause significant damage to some Brazilian industries.

“Steel products, transportation equipment (mainly aircraft and aircraft parts), specialized machinery (such as civil engineering equipment), and non-metallic minerals account for a significant portion of Brazilian exports to the U.S.,” said Felipe Arslan, CEO at Morada Capital.

Planemaker Embraer ADRs tumbled as much as 9% in after hours trading on the news.

At an event earlier at the White House, Trump complained that Brazil had “been not good to us.” His decision on Brazil, Trump said, was “based on very, very substantial facts, and also past history.”

The announcement came just days after Trump threatened to impose additional tariffs on members of the BRICS bloc of emerging market nations over its supposed “Anti-American policies” in the midst of the group’s leaders summit in Rio de Janeiro.

BRICS leaders hosted by Lula criticized trade-distorting tariff policies and military strikes on Iran in their official declaration, moves that put them at odds with Trump even as they shied away from direct challenges to the U.S.

After making little mention of Brazil over the initial months of his term, Trump also rushed to the defense of Jair Bolsonaro on Monday, accusing the South American nation of politically persecuting the right-wing former president who is facing a looming trial on charges that he attempted a coup.

In the letter, Trump reiterated his call on authorities to drop charges against Bolsonaro over an alleged coup attempt.

“This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!” Trump wrote.

Lula fired back at the end of the BRICS summit on Monday, telling Trump to mind his own business on Brazilian affairs and calling the U.S. leader “irresponsible for threatening tariffs on social media.” He also urged world leaders to find ways to reduce international trade’s reliance on the dollar.

A spokesperson for Brazil’s Supreme Court, which is overseeing Bolsonaro’s trial, declined to comment. Earlier Wednesday, Brazil’s foreign affairs ministry called the top U.S. representative in the country to a meeting to explain statements about Bolsonaro.

Brazil is unusual among Trump’s most recent tariff targets because it runs a deficit in trade with the U.S., while almost all the others post large surpluses. In 2024 Brazil imported some $44 billion of American products, while U.S. imports from Brazil were around $42 billion, according to the Census Bureau.

Brazil ranks among the top 20 U.S. trading partners. Out of the other seven countries cited in Trump’s announcements Wednesday, only the Philippines — which sent some $14.1 billion of goods to the U.S. last year — makes it into the top 50.

Imports from the remaining six nations put together amounted to less than $15 billion last year, with Iraq — an exporter of crude oil — accounting for about half of that sum.

Ahead of the announcement, Vice President Geraldo Alckmin said he saw no reason for a tariff increase because of the U.S. surplus.

“Any such measure targeting Brazil would be unfair and would actually harm the U.S. economy,” Alckmin, who also serves as the country’s minister of industry and trade, said. He added that Brazil won’t “change our tone” as it continues negotiations over steel tariffs and other levies.

Trump earlier this week maintained his initial tariff rate on South Africa, another BRICS member. The bloc also includes original members Russia, India and China, along with recent additions Ethiopia, Egypt, Iran, Indonesia and the United Arab Emirates.

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—With assistance from Vinícius Andrade.

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