President Donald Trump singled out Brazil for import taxes of 50% on Wednesday for its treatment of its former president, Jair Bolsonaro, showing that personal grudges rather than simple economics are a driving force in the U.S. leader’s use of tariffs.

Trump avoided his standard form letter with Brazil, specifically tying his tariffs to the trial of Bolsonaro, who is charged with trying to overturn his 2022 election loss. Trump has described Bolsonaro as a friend and hosted the former Brazilian president at his Mar-a-Lago resort when both were in power in 2020.

“This Trial should not be taking place,” Trump wrote in the letter posted on Truth Social. “It is a Witch Hunt that should end IMMEDIATELY!”

There is a sense of kinship as Trump was indicted in 2023 for his efforts to overturn the results of the 2020 U.S. presidential election. The U.S. president addressed his tariff letter to Brazilian President Luiz Inacio Lula da Silva, who bested Bolsonaro in 2022.

Bolsonaro testified before the country’s Supreme Court in June over the alleged plot to remain in power after his 2022 election loss. Judges will hear from 26 other defendants in coming months. A decision could come as early as September, legal analysts say. Bolsonaro has already been ruled ineligible until 2030 by the country’s electoral authorities.

Brazil’s vice president, Geraldo Alckmin, said he sees “no reason” for the U.S. to hike tariffs on the South American nation.

“I think he has been misinformed,” he said. “President Lula was jailed for almost two years. No one questioned the judiciary. No one questioned what the country had done. This is a matter for our judiciary branch.”

For Trump, the tariffs are personal

Trump also objected to Brazil’s Supreme Court fining of social media companies, saying the temporary blocking last year amounted to “SECRET and UNLAWFUL Censorship Orders.” Trump said he is launching an investigation as a result under Section 301 of the Trade Act of 1974, which applies to companies with trade practices that are deemed unfair to U.S. companies.

Among the companies the Supreme Court fined was X, which was not mentioned specifically in Trump’s letter. X is owned by Elon Musk, Trump’s multibillionaire backer in the 2024 election whose time leading Trump’s Department of Government Efficiency recently ended and led to a public feud over the U.S. president’s deficit-increasing budget plan. Trump also owns a social media company, Truth Social.

The Brazil letter was a reminder that politics and personal relations with Trump matter just as much as any economic fundamentals. And while Trump has said the high tariff rates he’s setting are based on trade imbalances, it was unclear by his Wednesday actions how the countries being targeted would help to reindustrialize America.

The tariffs starting Aug. 1 would be a dramatic increase from the 10% rate that Trump levied on Brazil as part of his April 2 “Liberation Day” announcement. In addition to oil, Brazil sells orange juice, coffee, iron and steel to the U.S., among other products. The U.S. ran a $6.8 billion trade surplus with Brazil last year, according to the Census Bureau.

Trump initially announced his broad tariffs by declaring an economic emergency, arguing under a 1977 law that the U.S. was at risk because of persistent trade imbalances. But that rationale becomes problematic in this particular case, as Trump is linking his tariffs to the Bolsonaro trial and the U.S. exports more to Brazil than it imports.

Trump also targeted smaller trade partners

Trump also sent letters Wednesday to the leaders of seven other nations. None of them — the Philippines, Brunei, Moldova, Algeria, Libya, Iraq and Sri Lanka — is a major industrial rival to the United States.

Most economic analyses say the tariffs will worsen inflationary pressures and subtract from economic growth, but Trump has used the taxes as a way to assert the diplomatic and financial power of the U.S. on both rivals and allies. His administration is promising that the taxes on imports will lower trade imbalances, offset some of the cost of the tax cuts he signed into law on Friday and cause factory jobs to return to the United States.

Trump, during a White House meeting with African leaders, talked up trade as a diplomatic tool. Trade, he said, “seems to be a foundation” for him to settle disputes between India and Pakistan, as well as Kosovo and Serbia.

“You guys are going to fight, we’re not going to trade,” Trump said. “And we seem to be quite successful in doing that.”

On Monday, Trump placed a 35% tariff on Serbia, one of the countries he was using as an example of how fostering trade can lead to peace.

Trump said the tariff rates in his letters were based on “common sense” and trade imbalances, even though the Brazil letter indicated otherwise. Trump suggested he had not thought of penalizing the countries whose leaders were meeting with him in the Oval Office — Liberia, Senegal, Gabon, Mauritania and Guinea-Bissau — as “these are friends of mine now.”

Countries are not complaining about the rates outlined in his letters, he said, even though those tariffs have been generally close to the ones announced April 2 that rattled financial markets. The S&P 500 stock index rose Wednesday.

“We really haven’t had too many complaints because I’m keeping them at a very low number, very conservative as you would say,” Trump said.

Tariff uncertainty returns with Trump’s letters

Officials for the European Union, a major trade partner and source of Trump’s ire on trade, said Tuesday that they are not expecting to receive a letter from Trump listing tariff rates. The Republican president started the process of announcing tariff rates on Monday by hitting two major U.S. trading partners, Japan and South Korea, with import taxes of 25%.

According to Trump’s Wednesday letters, imports from Libya, Iraq, Algeria and Sri Lanka would be taxed at 30%, those from Moldova and Brunei at 25% and those from the Philippines at 20%. The tariffs would start Aug. 1.

The Census Bureau reported that last year that the U.S. ran a trade imbalance on goods of $1.4 billion with Algeria, $5.9 billion with Iraq, $900 million with Libya, $4.9 billion with the Philippines, $2.6 billion with Sri Lanka, $111 million with Brunei and $85 million with Moldova. The imbalance represents the difference between what the U.S. exported to those countries and what it imported.

Taken together, the trade imbalances with those seven countries are essentially a rounding error in a U.S. economy with a gross domestic product of $30 trillion.

The letters were posted on Truth Social after the expiration of a 90-day negotiating period with a baseline levy of 10%. Trump is giving countries more time to negotiate with his Aug. 1 deadline, but he has insisted there will be no extensions for the countries that receive letters.

The tariff letters are worded aggressively in Trump’s style of writing. He frames the tariffs as an invitation to “participate in the extraordinary Economy of the United States,” adding that the trade imbalances are a “major threat” to America’s economy and national security.

The president threatened additional tariffs on any country that attempts to retaliate. He said he chose to send the letters because it was too complicated for U.S. officials to negotiate with their counterparts in the countries with new tariffs. It can take years to broker trade accords.

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Associated Press writers Mauricio Savarese in Rio de Janeiro, David McHugh in Frankfurt, Germany and Eileen Ng in Kuala Lumpur, Malaysia, contributed to this report.

This story was originally featured on Fortune.com

© Eva Marie Uzcategui/Bloomberg via Getty Images

When President Donald Trump last rolled out tariffs this high, financial markets quaked, consumer confidence crashed and his popularity plunged.

Only three months later, he’s betting this time is different.

In his new round of tariffs being announced this week, Trump is essentially tethering the entire world economy to his instinctual belief that import taxes will deliver factory jobs and stronger growth in the U.S., rather than the inflation and slowdown predicted by many economists.

On Tuesday, he told his Cabinet that past presidents who hadn’t aggressively deployed tariffs were “stupid.” Ever the salesman, Trump added that it was “too time-consuming” to try to negotiate trade deals with the rest of the world, so it was just easier to send them letters, as he’s doing this week, that list the tariff rates on their goods.

The letters marked a change from his self-proclaimed April 2 “Liberation Day” event at the White House, where he had posterboards with the rates displayed, a choice that led to a brief market meltdown and the 90-day negotiating period with baseline 10% tariffs that will end Wednesday. Trump, instead, chose to send form letters with random capitalizations and punctuation and other formatting issues.

“It’s a better way,” Trump said of his letters. “It’s a more powerful way. And we send them a letter. You read the letter. I think it was well crafted. And, mostly it’s just a little number in there: You’ll pay 25%, 35%. We have some of at 60, 70.”

When Trump said those words, he had yet to issue a letter with a tariff rate higher than 40%, which he levied Monday on Laos and Myanmar. He plans to put 25% tariffs on Japan and South Korea, two major trading partners and allies deemed crucial for curbing China’s economic influence. Leaders of the 14 countries tariffed so far hope to negotiate over the next three weeks before the higher rates are charged on imports.

“I would say that every case I’m treating them better than they treated us over the years,” Trump said.

The president said Tuesday evening on Truth Social that he would be releasing letters to “a minimum of 7 Countries” on Wednesday morning, with additional letters coming out in the afternoon.

Three possible outcomes

His approach is at odds with how major trade agreements have been produced over the last half-century, detailed sessions that could sometimes take years to solve complex differences between nations.

There are three possible outcomes to this political and economic wager, each of which could drastically reshape international affairs and Trump’s legacy.

Trump could prove most economic experts wrong and the tariffs could deliver growth as promised. Or he could retreat again on tariffs before their Aug. 1 start in a repeat of the “Trump Always Chickens Out” phenomenon, also known as TACO. Or he could damage the economy in ways that could boomerang against the communities that helped return him to the White House last year, as well as hurt countries that are put at a financial disadvantage by the tariffs.

Sen. Ron Wyden, D-Ore., said Trump’s letters had “extended his tariff purgatory for another month,” essentially freezing in place the U.S. economy as CEOs, foreign leaders and consumers are unclear of Trump’s actual strategy on foreign trade.

“The TACO negotiating tactic pioneered by Trump is making his threats less and less credible and reducing our trading partners’ willingness to even meet us halfway,” Wyden said. “There’s no sign that he’s any closer to striking durable trade deals that would actually help American workers and businesses.”

So far, the stock and bond markets are relatively calm, with the S&P 500 stock index essentially flat Tuesday after a Monday decline. Trump is coming off a legislative win with his multitrillion-dollar income tax cuts. And he’s confidently levying tariffs at levels that previously rocked global markets, buoyed by the fact that inflation has eased so far instead of accelerating as many economists and Democratic rivals had warned.

“By floating tariffs as high as 40% to even 100%, the administration has ‘normalized’ the 25% tariff hikes — yet this is still one of the most aggressive and disruptive tariff moves in modern history,” said Wendong Zhang, an economist at Cornell University. “This gradual unveiling, paradoxically, risks normalizing what would otherwise be considered exceptionally large tariff hikes.”

Others simply see Trump as a source of nonstop chaos, with the letters and their somewhat random tariff rates showing the absence of a genuine policy process inside his administration.

“It’s really just a validation that this policy is all over the place, that they’re running this by the seat of their pants, that there is no real strategy,” said Desmond Lachman, a senior fellow at the American Enterprise Institute, a right-leaning think tank.

Questions about how much money tariffs will generate

With Trump’s 90-day tariff negotiation period ending, he as of Monday had sent letters to 14 countries that place taxes on imported goods ranging from 25% to 40%. He said Tuesday he would sign an order to place 50% tariffs on copper and added that at some point pharmaceutical drugs could face tariffs of as much as 200%. All of that is on top of his existing 50% tariffs on steel and aluminum, 25% tariffs on autos and his separate import taxes on Canada, Mexico and China.

“The obvious inference is that markets for now are somewhat skeptical that Trump will go through with it, or alternatively they think compromises will be reached,” said Ben May, a director of global economic research at the consultancy Oxford Economics. “That’s probably the key element.”

May said the tariffs are likely to reduce the growth in U.S. household incomes, but not cause those incomes to shrink outright.

Trump has said his tariffs would close U.S. trade imbalances, though it’s unclear why he would target nations such as Tunisia that do relatively little trade with America. Administration officials say trillions of dollars in tariff revenues over the next decade would help offset the revenue losses from the continuation and expansion of his 2017 tax cuts that were signed into law Friday.

The federal government has collected $98.2 billion in tariff revenues so far this year, more than double what it collected last year, according to the Bipartisan Policy Center.

At Tuesday’s Cabinet meeting, Treasury Secretary Scott Bessent said the tariff revenues could be “well over $300 billion by the end of the year.” Bessent added that “we don’t agree” with the Congressional Budget Office estimate that tariffs would bring in $2.8 trillion over 10 years, “which we think is probably low.”

The governments of Japan, South Korea, Malaysia, Myanmar, Thailand, Cambodia and South Africa have each said they hope for further negotiations on tariffs with Trump, though it’s unclear how that’s possible as Trump has said it would be too “complicated” to hold all those meetings.

Instead on Tuesday, Trump posted on social media that the tariffs would be charged as scheduled starting Aug. 1.

“There has been no change to this date, and there will be no change,” Trump said on Truth Social. “No extensions will be granted.”

This story was originally featured on Fortune.com

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