- Brazil‘s President Lula announced new talks with the U.S. on a pending trade agreement, expecting a resolution within days.
- U.S. President Donald Trump imposed a 50% tariff on Brazil in July, citing concerns over the trial of former President Jair Bolsonaro.
- Key Brazilian exports, such as oranges and aircraft from Embraer, were exempt from the new tariffs.
- Lula criticized recent U.S. trade actions as incorrect but expressed willingness to negotiate and collaborate on Venezuela-related issues.
- The Brazilian stock ETF, EWZ, rose by nearly 37% this year, outpacing U.S. markets, despite current bearish sentiment among investors.
On Monday, Brazilian President Luiz Inacio Lula da Silva said that further discussions with the United States on a trade agreement are set to take place in Washington. A final deal is anticipated within days, according to statements made alongside the ASEAN summit in Malaysia.
In July, U.S. President Donald Trump imposed a 50% tariff on Brazilian imports. The decision followed legal proceedings against former President Jair Bolsonaro, whom Trump claims is facing a ‘witch hunt’ over alleged coup plotting. Trump also accused Brazil of unfair trade practices, despite the United States maintaining a trade surplus with the country.
Some major Brazilian exports, including oranges and aircraft made by Embraer, were not affected by the tariffs. However, Embraer CEO Francisco Gomes Neto warned that future U.S. orders might be canceled or delayed if the restrictions continued, stating in a Bloomberg interview, “We don’t have any cancellation issues at this point in time, but mid-term, this might happen.”
Lula called the U.S. actions “incorrect,” but indicated an openness to negotiation and expressed a willingness to cooperate with the United States on issues relating to Venezuela. “I told him that it was extremely important to take into account Brazil’s experience as the largest country in South America, as the most economically important country that has almost all of South America as a neighbor,” Lula said.
According to Reuters, Lula indicated that both sides were confident of a swift agreement. Additional reporting by Bloomberg confirmed expectations for a resolution within days.
Despite the ongoing dispute, the main Brazilian stock exchange-traded fund (ETF), EWZ, has climbed almost 37% in value this year, outperforming the U.S. S&P 500 index’s 14.9% increase. Investor sentiment, however, was bearish as of late October.
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