Trump shakes the table and imposes a 50% tariff on Brazil

U.S. President Donald Trump announced on Wednesday a new round of tariff demand letters, including a 50% rate on Brazil, one of the highest announced so far, set to take effect in August, Bloomberg reported.

Trump cited the treatment of former President Jair Bolsonaro in his letter to Brazil, calling on authorities to drop charges against him over an alleged coup attempt. “This Trial should not be taking place. It is a Witch Hunt that should end IMMEDIATELY!” Trump wrote in the letter.

The very high 50% rate will strongly impact Brazil’s sales to the U.S., if implemented. For beef exports, it would imply a 76.4% duty for the remainder of the year starting August 1, as Brazil has already exhausted the duty-free quota for third countries.

The expectation, up to August 1, is for very large volumes shipped by Brazil to the U.S. to take advantage of the weeks prior to the tariff hike, which will likely cause strong distortions in exports from all origins to the world’s largest economy.

On Wednesday, Trump also said he would impose a 30% tariff on Algeria, Libya, Iraq, and Sri Lanka, 25% on products from Brunei and Moldova, and 20% on goods from the Philippines. The levies were largely in line with rates Trump had initially announced in April against those countries, though Iraq’s duties are down from 39% and Sri Lanka’s reduced from 44%.

Brazil is the first country to receive one of Trump’s tariff notifications that was not on the initial list of trading partners when he announced higher so-called reciprocal tariffs in April. And the letter to Brazil also presents a warning shot to the BRICS group of developing nations, which Trump has cast as a threat to the U.S. dollar’s status as the world’s key currency.