Economists suggest Brazil may gain from U.S. tariffs, which include a 10% duty on exports. Market reactions have been positive, with a strengthening real and rising stock indexes. Experts foresee potential investment growth and competitive advantages for Brazilian sectors. The trade relationship with the U.S. remains strong, with the U.S. maintaining a surplus in trade with Brazil.

Brazil may benefit from the recent imposition of U.S. tariffs, according to economists. Despite a 10% duty on exports to the U.S., local markets responded favorably, with the Brazilian real strengthening to its highest level since October 2024 and the benchmark stock index rising by 0.23%. The lighter tariff burden on Brazil could mitigate trade risks and draw capital away from the United States.

XP’s research team commented on the situation, stating that Trump’s tariff actions are “bad in the absolute, potentially net positive for Brazil”. They noted that a trade war might benefit Brazil, leading to increased Chinese investment in infrastructure within the country and broader Latin America. Historical context indicates that during the 2018-2020 China trade war, Brazil gained from higher commodity demand as China shifted its focus from the U.S. to Brazil for products such as soybeans and corn.

Iana Ferrao from BTG Pactual remarked that the tariffs were a relief for Brazilian sectors that feared more severe penalties. She noted that relative to other countries facing sharper tariff increases, Brazilian sectors could strengthen their competitive edge. Luis Stuhlberger, chief investment officer at Verde Asset Management, emphasized that Brazil’s favorable trade position with the U.S. has resulted in significant benefits under the global tariff framework, but questioned whether Brazil could capitalize on this opportunity.

Brazilian government officials have reiterated that the nation’s trade relations with the U.S. do not compromise the American economy. Since 2008, the U.S. has maintained a trade surplus with Brazil, which reached $253 million last year out of more than $80 billion in bilateral trade.

In conclusion, Brazil’s response to recent U.S. tariffs appears to position it favorably in international trade dynamics. Economists highlight the potential gains from increased Chinese investment and a relatively competitive edge for Brazilian exports. The Brazilian government’s emphasis on a robust trade relationship with the U.S. further underscores the strategic opportunities available to Brazil in light of these developments.

Original Source: money.usnews.com

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