Latest news with #Brasilia
Reuters
4 hours ago
- Business
- Reuters
Trump hits Brazil with tariffs, sanctions but key sectors excluded
SAO PAULO/BRASILIA, July 30 (Reuters) - U.S. President Donald Trump on Wednesday slapped a 50% tariff on most Brazilian goods to fight what he has called a "witch hunt" against former President Jair Bolsonaro, but softened the blow by excluding sectors such as aircraft, energy and orange juice from heavier levies. Trump announced the tariffs, some of the steepest levied on any economy in the U.S. trade war, as his administration also unveiled sanctions on the Brazilian supreme court justice who has been overseeing Bolsonaro's trial on charges of plotting a coup. "Alexandre de Moraes has taken it upon himself to be judge and jury in an unlawful witch hunt against U.S. and Brazilian citizens and companies," Treasury Secretary Scott Bessent said in a statement. Moraes, he said, "is responsible for an oppressive campaign of censorship, arbitrary detentions that violate human rights, and politicized prosecutions — including against former President Jair Bolsonaro." Trump's final tariff order and the sanctions followed weeks of sparring with Brazilian leader Luiz Inacio Lula da Silva, who has likened the U.S. president, a close ideological ally of Bolsonaro's, to an unwanted "emperor." Despite Trump's effort to use the tariffs to alter the trajectory of a pivotal criminal trial, the range of exemptions came as a relief for many in Brasilia, who since Trump announced the tariff earlier this month had been urging protections for major exporters caught in the crossfire. Shares of planemaker Embraer ( opens new tab and pulpmaker Suzano ( opens new tab rose. "We're not facing the worst-case scenario," Brazilian Treasury Secretary Rogerio Ceron told reporters. "It's a more benign outcome than it could have been." The new tariffs will go into effect on August 6, not on Friday as Trump announced originally. In a factsheet about Trump's executive order on Wednesday, the White House tied the tariffs to Brazil's prosecution of Bolsonaro, who is standing trial on charges of plotting to overturn his 2022 electoral loss. Trump's executive order formalizing a 50% tariff excluded dozens of key Brazilian exports to the United States, including civil aircraft, pig iron, precious metals, wood pulp, energy and fertilizers. Embraer said an initial review indicated that a 10% tariff imposed by Trump in April remains in place, with the exclusion applying to the additional 40%. The exceptions are likely a response to concerns from U.S. companies, rather than a step back from Trump's efforts to influence Brazilian politics, said Rafael Favetti, a partner at political consultancy Fatto Inteligencia Politica in Brasilia. "This also shows that Brazilian diplomacy did its work correctly by working to raise awareness among U.S. companies," he said. Brazilian Minister of Foreign Affairs Mauro Vieira said he met with U.S. Secretary of State Marco Rubio on Wednesday to reaffirm the country's willingness to negotiate the tariffs, in a sign that negotiations that had stalled in June could restart. Vieira stressed that Bolsonaro's legal woes cannot be included in negotiations, he said. The State Department did not immediately reply to a request for comment. Despite the exemptions, it was too soon to celebrate, said former Brazilian trade secretary Welber Barral, estimating that Brazil exports some 3,000 different products to the United States. "There will be an impact," Barral said. An analysis by the American Chamber of Commerce for Brazil showed that almost 700 products were exempted from the higher tariffs, covering 43.4% of Brazil's total exports to the United States by value. Among the top concerns in the government of Lula, Bolsonaro's leftist rival, was Embraer, which exports 45% of its commercial aircraft and 70% of its executive jets to the United States. Analysts had also warned of a serious potential impact on Suzano, one the world's largest wood pulp producers. Embraer shares rose 11% in Sao Paulo, and Suzano gained over 1% in afternoon trading. Oil lobby group IBP said oil shipments to the U.S., which had been suspended, would resume after oil products were listed as exempt from the new tariffs. Mining lobby Ibram, meanwhile, said the exemptions covered 75% of mining exports. But other crucial sectors could not dodge Trump's fusillade. Wednesday's executive order did not include exemptions for beef or coffee, two key exports to the United States. Roberto Perosa, the head of Brazilian meatpacking lobby Abiec, which represents beef producers including JBS and Marfrig ( opens new tab, told reporters on Wednesday that the group estimates losses of $1 billion in the second half of this year because of the new tariffs. Brazilian coffee exporters group Cecafe said in a statement that it will continue working for coffee to be included among the exemptions. And the battle over the tariffs is set to continue, with the political motivation behind them providing ammunition to plaintiffs who have launched a court challenge. Alex Jacquez, who served at the White House National Economic Council under then-President Joe Biden, said in a statement that the new tariffs were a clear violation "of both the law and Trump's own stated trade policy." "We run a trade surplus with Brazil - these punitive tariffs will not serve to rebalance any unfair trade, it will only serve to make a cup of coffee more expensive," he said.
Reuters
5 hours ago
- Business
- Reuters
Brazil pauses rate hikes, signals prolonged hold, eyeing US tariffs
BRASILIA, July 30 (Reuters) - Brazil's central bank held its benchmark interest rate steady on Wednesday, pausing an aggressive tightening cycle after seven consecutive hikes as widely expected, with U.S. tariffs adding to policymakers' heightened caution. The bank's monetary policy committee, known as Copom, kept its benchmark Selic rate at 15.00%, the highest level since July 2006. All 35 economists surveyed by Reuters from July 21-25 had forecast the decision. With stable rates largely priced in, market attention turned to the central bank's statement for any hints on when rate cuts could begin in Latin America's largest economy. But the central bank remained cautious and sought to steer clear of that debate in its policy statement, released the same day that the U.S. Federal Reserve also held rates steady despite political pressure to start cutting borrowing costs. Copom paused its rate-hiking cycle "to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level, assuming it is stable for a very prolonged period, will be enough to ensure the convergence of inflation to the target," policymakers said in their statement. With Brazil bracing for a 50% U.S. tariff - a move that makes it among the trade partners hardest hit by President Donald Trump's policies, despite the exclusion of several key Brazilian exports - the central bank said the global outlook has become more adverse and uncertain. "The committee has been closely monitoring the announcements on tariffs by the U.S. to Brazil, which reinforces its cautious stance in a scenario of heightened uncertainty," it said. Rodolfo Margato, an economist at XP, said the central bank's statement may be read as slightly hawkish by markets, as the central bank kept its inflation forecasts unchanged, while markets had expected a slight downward revision. Still, Margato said there were no elements that would change the course of monetary policy in the short term, and he forecast a first rate cut only in January. Policymakers projected on Wednesday that 12-month inflation will reach 3.4% in the relevant horizon for the bank's current monetary policy decisions, which is now the first quarter of 2027. The figure matches the central bank's June estimate for that period, even after factoring in a tighter interest rate path based on the bank's latest weekly survey of economists. For this year and the next, the central bank kept its inflation forecasts unchanged at 4.9% and 3.6%, respectively. The central bank again warned in its statement that it would not hesitate to resume hikes if deemed necessary. Inflation-adjusted borrowing costs in Brazil are deep in restrictive territory, surpassing even those in Russia and Turkey, helping to attract capital inflows and strengthen the country's currency by about 10% this year and easing some pressure on consumer prices. Even so, Brazil has seen inflation running well above its official 3% target for several months, fueled by an overheated economy, government stimulus measures, and a tight labor market. Market expectations for inflation also remain unanchored from the target in coming years, despite some recent improvement for this year and next, after recent indicators began to show the impact of steep interest rates on credit and cooling economic activity.
France 24
5 hours ago
- Business
- France 24
Brazil Central Bank holds interest rate as tariffs loom
The bank's decision came after seven straight hikes that had angered leftist President Luiz Inacio Lula da Silva, who argues high rates stifle growth. The bank's Copom monetary policy committee said in a statement it had been "closely monitoring announcements related to the imposition of trade tariffs on Brazil by the United States." A scenario of "greater uncertainty" had informed a cautious stance, it added. Washington earlier announced tariffs of 50 percent on Brazilian goods, with exemptions on key exports including planes, orange juice and pulp, Brazil nuts, and some iron, steel and aluminum products. With the tariffs, US President Donald Trump make good on his threat to wield American economic might to punish Brazil for what he has termed a "witch hunt" against his far-right ally Jair Bolsonaro, on trial for an alleged coup attempt. Unlike the tariffs Trump is slapping on economies around the world, the measures against Brazil have been framed in openly political terms, sweeping aside centuries-old trade ties and a surplus that Brasilia put at $284 million last year. Brazil's benchmark interest rate, known as the Selic, remains at its highest level since 2006, and is one of the highest in the world. The bank had raised the rate seven times in succession in a bid to curb inflation.
Reuters
6 hours ago
- Business
- Reuters
Brazil central bank pauses tightening after seven straight hikes
BRASILIA, July 30 (Reuters) - Brazil's central bank held its benchmark interest rate steady on Wednesday, pausing an aggressive tightening cycle after seven consecutive hikes as widely expected after a signal last month that it would hold rates for a "very prolonged" period. The bank's monetary policy committee, known as Copom, kept its benchmark Selic rate at 15.00%, the highest since July 2006. All 35 economists surveyed by Reuters between July 21-25 had forecast the decision. With stable rates largely priced in, market attention turned to the central bank's statement for any hints on when rate cuts could begin in Latin America's largest economy. But the central bank remained cautious and sought to steer clear of that debate in its policy statement, released on the same day the U.S. Federal Reserve held rates steady despite political pressure to start cutting borrowing costs. Copom paused its rate-hiking cycle "to examine its yet-to-be-seen cumulative impacts, and then evaluate whether the current interest rate level, assuming it is stable for a very prolonged period, will be enough to ensure the convergence of inflation to the target," policymakers wrote in their statement. Policymakers again warned they would not hesitate to resume hikes if deemed necessary. Inflation-adjusted borrowing costs in Brazil are in deep in restrictive territory, surpassing even those in Russia and Turkey, which has helped attract capital inflows and strengthen the country's currency by about 10% this year, easing some pressure on consumer prices. Even so, Brazil has seen inflation running well above its official 3% target for several months, fueled by an overheated economy, government stimulus measures, and a tight labor market. Market expectations for inflation also remain unanchored from the target in coming years, despite some recent improvement for this year and next, after recent indicators began to show the impact of steep interest rates on credit and cooling economic activity.
France 24
7 hours ago
- Business
- France 24
Trump punishes Brazil with tariffs, sanctions over trial of ally Bolsonaro
The announcement saw Trump make good on a threat to wield American economic might to punish Brazil -- and Supreme Court Justice Alexandre de Moraes in particular -- for what he has termed a "witch hunt" against former president Bolsonaro. Unlike the tariffs Trump is slapping on economies around the world, the measures against Brazil have been framed in openly political terms, sweeping aside centuries-old trade ties and a surplus that Brasilia put at $284 million last year. The moves dramatically increased the pressure on Moraes, who has emerged as one of the most powerful and polarizing people in Brazil -- and a consistent thorn in the far-right's side, after clashing repeatedly with Bolsonaro and others over disinformation. The Brazilian government's "politically motivated persecution, intimidation, harassment, censorship, and prosecution of (Bolsonaro) and thousands of his supporters are serious human rights abuses that have undermined the rule of law in Brazil," the White House said in a fact sheet announcing the tariffs. It also cited Brazil's "unusual and extraordinary policies and actions harming U.S. companies, the free speech rights of U.S. persons, U.S. foreign policy, and the U.S. economy," and singled out Moraes by name. It did not state what date the tariffs would come into effect, but Trump had previously cited August 1. The new duties were announced shortly after the US Treasury slapped sanctions on Moraes, which followed a similar move by the State Department earlier this month. The sanctions provoked a swift and furious response from Brasilia, where Attorney General Jorge Messias slammed them as "arbitrary," "unjustifiable" and "a serious attack on the sovereignty of our country." There was no immediate reaction from Brasilia to the tariffs announcement, but President Luiz Inacio Lula da Silva had earlier denounced Trump's threats as "unacceptable blackmail." Bolsonaro is on trial for allegedly plotting a coup to stay in power after losing the 2022 election to leftist Lula. He risks up to 40 years in prison if convicted. Prosecutors say the plot included a plan to arrest and even assassinate Lula, his vice president Geraldo Alckmin, and Moraes. Brazil has insisted it will proceed in its prosecution of Bolsonaro, and Trump's intervention in the case has so far improved Lula's popularity, as the Brazilian leader appeals for national unity in the face of US "interference." 'Witch hunt' Both Marco Rubio, America's top diplomat, and US Treasury Secretary Scott Bessent issued statements Wednesday announcing the new sanctions against Moraes. "Moraes has taken it upon himself to be judge and jury in an unlawful witch hunt against US and Brazilian citizens and companies," Bessent said. Rubio, the secretary of state, accused Moraes of "serious human rights abuses, including arbitrary detention involving flagrant denials of fair trial guarantees and infringing on the freedom of expression." Moraes, 56, has played a controversial role in fighting disinformation. He was an omnipresent figure during the polarizing 2022 election campaign, aggressively using his rulings to fight election disinformation on social media. That included blocking the accounts of some prominent conservative figures. Last year, he ordered the shutdown of tech titan Elon Musk's X network in Brazil for 40 days for failing to tackle the spread of disinformation shared mainly by Bolsonaro backers. Bolsonaro has called Moraes a dictator, while his son Eduardo, an MP, had lobbied for US sanctions against the "totalitarian" judge. On Wednesday Eduardo Bolsonaro said the US action was "not about revenge, it's about justice." "Abuses of authority now have global consequences," he wrote on X. Trump's private media company has also sued Moraes over his social media-related orders. The US Treasury cited the Magnitsky Act for the sanctions. It freezes US-based assets and bars travel to the country for foreign officials accused of human rights abuses or corruption.
