FX.co ★ Ibovespa Falls on US Tariff Shock

The Ibovespa index tumbled beyond 137,000 on Thursday, continuing its decline following US President Trump's announcement of a 50% tariff imposition on Brazil. This decision, which had been previously indicated, represents a significant increase from the initial 10% tariff discussed during "Liberation Day." President Trump attributed the tariff hike to Brazil's legal actions against former President Bolsonaro, even though the US maintains a trade surplus with Brazil. This led President Lula to propose countermeasures in retaliation. The escalation jeopardizes vital trading relationships with the US, Brazil's second-largest export market, and has intensified fluctuations in currency and future rates. This situation poses fiscal risks and threatens economic growth prospects if the trade tensions intensify. Petrobras shares fell over 1%, driven by concerns over oil and fuel exports to the US, Brazil's largest export category. Meanwhile, iron ore producer Vale and steel manufacturers Gerdau and CSN managed to somewhat recover from their previous heavy losses. Aircraft manufacturer Embraer, however, saw its stock drop by 6%, totaling a 12% decrease for the week.