President 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 cited Jair Bolsonaro — the right-wing former president and Lula rival who is facing a trial on charges that he attempted a coup following his 2022 election defeat.

Trump made a direct link to politics, saying 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 charges against Bolsonaro, a leader who mimicked Trump’s political style during his presidency, stem from an investigation into post-election riots in Brazil’s capital that have drawn comparisons to the Jan. 6, 2021, insurrection attempt in Washington.

Bolsonaro has repeatedly appealed for Trump’s help as his legal woes mount.

The Brazilian real slumped nearly 3% against the U.S. dollar on the back of the announcement, while the iShares MSCI Brazil ETF — the largest US-listed exchange-traded fund tracking the nation’s equities — was down almost 2% 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, the latest of more than 20 posted by Trump in recent days, was the first substantial upward revision from previously announced rates. While it borrows language about “reciprocity” from the others, Brazil is the first receiver that does not run a goods trade surplus with the U.S. — suggesting particular frustration on the part of Trump.

Shortly after the announcement, Lula called top cabinet members — including Finance Minister Fernando Haddad, Foreign Minister Mauro Vieira, and Vice President Geraldo Alckmin, who also heads Brazil’s ministry of industry and trade — into a meeting at the presidential palace, according to two people with knowledge of the situation.

In a social media post late on Wednesday, Lula said Brazil will not be “tutored” by anyone, adding the case against those who planned a coup is a matter solely for the country’s justice system and “not subject to interference or threat.”

“Any unilateral rate hikes will be responded to using Brazil’s economic reciprocity law,” Lula wrote. “The sovereignty, respect and intransigent defense of the Brazilian people’s interests are what guide our relations with the world.”

The U.S. is Brazil’s second-largest trading partner, trailing only China, and such a high tariff could cause significant damage to some of the South American nation’s 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 US,” said Felipe Arslan, CEO at Morada Capital.

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

Beyond the economic repercussions, analysts expressed concerns about the political ramifications of the tariffs. The U.S. and Brazil are historic partners that have long enjoyed strong relations even when led by presidents with ideological differences, a dynamic Trump’s announcement threatens to put at risk.

“It’s not just a matter of bilateral trade,” said Solange Srour, head of Brazil macroeconomics at UBS Global Wealth Management. “These tariffs are showing that our relations between countries as a whole, institutionally, are degraded and damaged. 50% is a tariff that, in many cases, can make exports unfeasible.”

Trump’s announcement came just days after he’d threatened to impose additional tariffs on members of the BRICS bloc of emerging market nations over its supposed “Anti-American policies.” BRICS leaders hosted by Lula in Rio de Janeiro this week had 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 US.

After making little mention of Brazil over the initial months of his term, Trump also rushed to the defense of Bolsonaro on Monday, accusing the South American nation of politically persecuting the former president.

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

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

Trump also ordered U.S. Trade Representative Jamieson Greer to launch a Section 301 probe of Brazil, citing what he said were the country’s “continued attacks on the Digital Trade activities of American Companies.”

Such a probe, which are used to investigate potentially unfair trade practices, could lead to additional US penalties against Brazil.

On Monday, Lula blasted Trump at the end of the BRICS summit, telling him to mind his own business and calling him “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 US, while almost all the others post large surpluses. In 2024 Brazil imported some $44 billion of American products, while US 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 US 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, Alckmin cited the trade surplus to argue that hiking the tariffs would be unfair and would hurt the US economy.

With the American cattle herd the smallest since the 1950s, meatpackers have been relying on more supplies from countries such as Brazil. In 2024, about $1.4 billion of beef was imported into the US from Brazil, with supplies shipped in through the first five months of 2025 also surpassing the same period in 2024.

And while Brazil and the US compete in some agricultural markets, the South American country also produces tropical products like coffee and cocoa that can’t be grown in the continental US.

The U.S. imported nearly $2 billion worth of coffee from Brazil last year, according to the U.S. Department of Agriculture.

____

(With assistance from Vinícius Andrade, Leda Alvim, Michael Hirtzer, Ilena Peng, Derek Wallbank, Josh Wingrove and Justin Sink.)

©2025 Bloomberg L.P. Visit bloomberg.com. Distributed by Tribune Content Agency, LLC.