FX.co ★ Ibovespa Drops Amid US Tariffs and Tax Tensions

The Ibovespa declined on Wednesday, slipping below the 135,500 mark, as attention centered on Brazil's strategy in response to a newly imposed 50% tariff on its exports. Vice President and Industry Minister Geraldo Alckmin assured that the Brazilian government is committed to overturning the tariff and may seek additional time for negotiations if necessary. Alckmin is scheduled to meet with industry representatives and Abrão Neto, the head of the American Chamber of Commerce for Brazil. Meanwhile, investors are also considering the unproductive conciliation hearing between the government and Congress regarding the proposed increase in the financial transactions tax, with both sides choosing to await a judicial decision. Additionally, recent US inflation data indicated rising prices for goods affected by tariffs, reducing expectations of imminent interest rate cuts by the Federal Reserve. Market sentiment was further dampened by former President Trump's tariff threats targeting smaller countries. Notably, shares of companies with significant US exposure, such as Gerdau (-1.7%), Vale (-2.6%), Petrobras (0.8%), CSN (-0.6%), and Embraer (-0.6%), experienced declines.