Trump threatens Brazil with 50% tariff over Bolsonaro legal case

US President Donald Trump has threatened to impose a 50% tariff on Brazil, citing the legal case against former Brazilian President Jair Bolsonaro.

In a post on his social media account, Trump referred to Jair Bolsonaro, the former right-wing president and rival to Lula da Silva, who is on trial for an attempted coup following his defeat in the 2022 elections.

Trump established a political link, stating that he made this change “partly due to Brazil’s insidious attacks on free elections and the fundamental free speech rights of Americans.”

The charges against Bolsonaro, who emulated Trump’s political style during his presidency, stem from an investigation into post-election events in Brazil’s capital, which have been compared to the insurrection attempt in Washington on January 6, 2021.

As his legal troubles have mounted, Bolsonaro has repeatedly sought help from Trump.

Following Trump’s announcement, the Brazilian real lost about 3% of its value against the US dollar, and the iShares MSCI Brazil ETF, the largest exchange-traded fund tracking the country’s stocks in the US, fell by approximately 2% at market close.

Brazil was already set to be subject to a tax of at least 10% under the “reciprocal” tariffs Trump announced in April.

This letter, the latest in a series of more than 20 issued by Trump in recent days, marked the first significant increase over previously announced rates.

Shortly after the announcement, Lula convened a meeting at the presidential palace with senior cabinet members, including Finance Minister Fernando Haddad, Foreign Minister Mauro Vieira, and Vice President Geraldo Alckmin, who also heads the Brazilian Ministry of Industry and Commerce, according to two people familiar with the situation.

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

Lula said, “Any unilateral tariff increase will be met with Brazil’s economic reciprocity law. The sovereignty, respect, and interests of the Brazilian people are the principles that guide our relations with the world.”

The US is Brazil’s second-largest trading partner after China, and such a high tariff could cause significant damage to certain sectors of the South American country’s economy.

“Steel products, transportation equipment (especially aircraft and aircraft parts), special machinery (like construction equipment), and non-metallic minerals constitute a significant portion of Brazil’s exports to the US,” said Felipe Arslan, CEO of Morada Capital, speaking to Bloomberg.

Beyond the economic effects, analysts expressed concern about the political consequences of the tariffs.

The US and Brazil are historic partners that have long maintained strong relations, even when led by presidents with ideological differences, and Trump’s dynamic announcement risks jeopardizing these ties.

“This is not just a matter of bilateral trade. These tariffs indicate an institutional deterioration and damage to the relationship between our countries. A 50% tariff could make exports impossible in many cases,” said Solange Srour, head of macroeconomics for Brazil at UBS Global Wealth Management.

Trump’s announcement came just days after he threatened to impose additional tariffs on developing countries in the BRICS bloc for their “anti-American policies.”

BRICS leaders, hosted by Lula in Rio de Janeiro this week, criticized trade-distorting tariff policies and military strikes against Iran in their official communiqués. Although these steps avoided a direct challenge to the US, they created friction with Trump.

Having rarely mentioned Brazil in the first months of his term, Trump rushed to Bolsonaro’s defense on Monday, accusing the South American nation of “political persecution” against its former president.

In the letter, Trump reiterated his call for authorities to drop the charges related to the coup attempt allegations against Bolsonaro.

“This case should not be tried. This is a witch hunt and must end immediately!” Trump wrote.

Trump also instructed US Trade Representative Jamieson Greer to launch a Section 301 investigation against Brazil, citing the country’s “ongoing attacks on the digital trade activities of American companies.”

Such an investigation, used to probe potentially unfair trade practices, could lead to the US imposing additional sanctions on Brazil.

On Monday, at the end of the BRICS summit, Lula sharply criticized Trump, telling him to mind his own business and that he was “not responsible for threatening tariffs on social media.”

Lula also called on world leaders to find ways to reduce international trade’s dependence on the dollar.

A spokesperson for the Brazilian Supreme Court, which is overseeing Bolsonaro’s trial, declined to comment. Earlier on Wednesday, the Brazilian Foreign Ministry summoned the top US representative in Brazil to a meeting to provide information about the statements regarding Bolsonaro.

Brazil is an unusual case among Trump’s latest tariff targets because it runs a trade deficit with the US, whereas nearly all other targeted countries have large surpluses. According to statistics, in 2024, Brazil imported approximately $44 billion worth of American products, while US imports from Brazil totaled about $42 billion. Brazil is among the top 20 trading partners of the US.