The global economic fallout: The view from Brazil

As the US targets China in its trade war, economic risks for Latin America are rising, and Brazil is especially exposed.

After announcing tariffs for most countries at the beginning of April, US President Donald Trump recently halted the higher ones for 90 days but maintained a 10% base rate. Yet, Trump, after confusion ensued on Thursday, increased the tariffs on China to 145%.

Analysts initially believed that Latin American countries escaped the worst tariffs, as they were facing 10% from the start. However, uncertainty over which tariffs apply to which countries is hindering economic growth and has indirect effects.

BNamericas has been tracking the developments and talked to various stakeholders to shine a light on the situation.

Trade 

Brazil's trade balance is expected to be hit by the tariffs. Brazilian foreign trade association AEB initially projected a trade surplus of US$93bn in 2025, but had to revise the figure downward. Last year's trade surplus reached US$74.6bn.

"I'm revising my estimate for this year's trade surplus downward, to around US$60bn, and I believe that, depending on how the situation evolves, it could be even lower. This revision comes as we're seeing a broad-based decline in the prices of Brazil's main export commodities and that trend could worsen as signs of a global economic slowdown grow, with even some indications of a potential international recession," AEB head José Augusto de Castro told BNamericas.

Read the full interview with De Castro: Brazil's outlook dims as tariffs disrupt global trade

Economy 

Brazil will be affected above of all because China and the US are its biggest trade partners.

The metals and mining sector will be hit because China is the largest buyer of Brazil's iron ore. Yet, assets linked to infrastructure appear more secure, as long-term contracts include mechanisms that protect against inflationary fluctuations. 

For details, read Trade war of choice: Brazil in the crossfire of US-China tensions

Oil and gas 

Especially the oil and gas industry is monitoring the situation as prices are falling.

On the upside, federal oil firm Petrobras confirmed that it will not paralyze any exploration and production projects due to falling oil prices.

"We're talking about projects that will be installed in two, three, four years. They are resilient to low oil prices," E&P head Sylvia Anjos told reporters recently. 

See more details here: Petrobras to maintain E&P projects despite falling oil price

For a deep dive into Brazil's global ties, read Spotlight: Brazil's international energy relations