Former U.S. President Donald Trump has threatened to impose a 50% tariff on Brazilian goods, sending shockwaves through markets and deepening tensions with Latin America’s largest economy. The Brazilian real plunged nearly 3% against the dollar, and Brazil’s stock ETF in the U.S. dropped 2% in after-hours trading.
Trump made the announcement via social media, linking the decision to “attacks on free elections and speech” in the U.S., and pointed directly to former Brazilian President Jair Bolsonaro—his right-wing ally now facing trial over alleged coup attempts. The move marks a sharp political escalation, diverging from the reciprocal tariff logic applied to other nations.
President Luiz Inácio Lula da Silva responded swiftly, summoning key cabinet officials and asserting Brazil’s sovereignty. “We will not be tutored by anyone,” Lula said, vowing retaliation under Brazil’s economic reciprocity laws.
The tariffs would heavily impact sectors like steel, aviation, and machinery. Shares of aircraft maker Embraer tumbled 9% in extended trading.
Analysts warn the dispute could damage long-standing U.S.-Brazil ties. “These tariffs institutionalize degradation in bilateral relations,” said UBS economist Solange Srour.
The announcement comes amid BRICS tensions. Lula recently hosted leaders critical of U.S. trade and military policies. Trump’s letter also called for dropping charges against Bolsonaro, labeling his trial a “witch hunt.”
Trump instructed the U.S. Trade Representative to investigate Brazil under Section 301, citing unfair digital trade practices.