Brazil is among the latest countries that received a letter from President Donald Trump threatening higher tariffs, putting pressure on one of the top-performing markets in the world. Trump said in his letter the U.S. will impose a 50% tariff on Brazilian imports, partly in retaliation for the country prosecuting former Brazilian President Jair Bolsonaro for what authorities say was a coup attempt. Brazil’s current leader, Luiz Inacio Lula da Silva, said it will retaliate against the U.S. with similar duties. The escalation in trade tensions with Latin America’s largest economy comes as Brazil’s stock market enjoys a strong year. The Bovespa index is up 14% in 2025, far outpacing the S & P 500’s 6% advance. The iShares MSCI Brazil (EWZ) exchange-trade fund has popped 25% in that time. But EWZ lost more than 2% premarket Thursday after Trump’s announcement. Brazilian oil giant Petrobras also lost 2% before the market opened. EWZ 5D mountain EWZ 5-day chart “If the 50% tariff rate remained in place, it would present a negative shock to the Brazilian economy, but one that would be modest in size,” UBS said in a note. “However, the U.S.’s 50% tariff would impact more strongly certain products, such as semi-manufactured iron and steel (72.5% of exports are destined for the U.S.), aircraft (63.2%), construction materials (57.5%), ethanol (48.5%) and wood and related products (43.2%).” Bank of America strategist David Becker also thinks the impact on Brazil stocks could be limited. “U.S. tariffs on Brazil have a limited direct impact on the Ibovespa [stock index]: we estimate that only 1% of Ibov revenues come from exports from Brazil to the U.S.,” Becker said. Bottom line: Trump’s latest tariff shock targeting Brazil could be a buying opportunity for those looking for exposure to one of this year’s best-performing markets. Elsewhere Thursday on Wall Street, Goldman Sachs upgraded McDonald’s to buy for neutral after the fast food chain underperformed the wider market so far in 2025. “We believe MCD ultimately has the scale/marketing/digital advantage to successfully navigate through this environment. Management has firmly committed to market share gains through product and marketing innovation (including return of snack wraps, addition of daily double burger to the McValue platform in the U.S.), and we think this could drive a reversal to positive comp trends,” Goldman analyst Christine Cho said.