FX.co ★ Ibovespa Falls as Trump Escalates Trade Tensions

The Ibovespa index experienced a decline of 0.4%, dropping below the 137,000 mark, as investor confidence took a hit following US President Donald Trump's announcement of a new 35% tariff on Canadian imports. Trump also suggested a potential increase in the baseline US tariff from the current 10% to 15% or even 20%, which generated negative reactions in the markets amid aspirations for trade progress. In Brazil, the IBGE revealed that services activity only grew by 0.1% in May, falling short of expectations. Moreover, the July Macrofiscal Bulletin revised the 2025 GDP growth projection upward to 2.5% from 2.4%, but maintained the primary deficit forecast at R$72.1 billion. On the corporate scene, stocks with significant exposure to the US market remained under pressure as investors evaluated the consequences of a potential 50% tariff hike by the US if President Trump proceeds with it. Embraer, in particular, faced a 3.9% drop due to its considerable US airline clientele. Additionally, the loss was extended among commodity exporters, with Gerdau falling 2.6%, CSN down by 0.4%, and Petrobras and Vale each decreasing by 0.2%.