Synthesis of the Brazilian Economy

BRAZIL ECONOMICS - Report 04 Aug 2025 by Alexandre Schwartsman, Cristina Pinotti and Diego Brandao

OVERVIEW

UNCERTAINTY IS THE NAME OF THE GAME

The 50% tariff rise on U.S. imports of Brazilian products caused a rupture in diplomatic relations between the two countries, triggering the most acute political and economic crisis since Brazil’s redemocratization. Following Trump’s election, the ideological clash between him and Lula took center stage, manifesting in disregard for both formal and informal rules of diplomatic civility, with displays of bravado on both sides. The economic impacts are only beginning to emerge. On the Brazilian side, Lula has been delivering aggressive rhetoric against the United States while signaling closer political and economic ties with Russia and China. Under the banner of South-South diplomacy, long championed by the Workers' Party and Lula’s key advisor Celso Amorim, Lula has advocated for the creation of a new currency among Global South nations to replace the dollar in trade. Coldness toward Trump, criticisms of Ukraine and Israel, and public displays of friendship with Xi Jinping and "comrade" Putin have cemented a shift in Brazil’s diplomatic posture, moving away from its traditional alignment with Western democracies. For pro-Western democrats, the hope lies in finalizing the Mercosur-EU agreement as a means to end the country's growing isolation. To make an already volatile situation worse, the upcoming trial of former president Bolsonaro, currently forced to wear an electronic ankle monitor due to flight risk, adds further tension. Entry visas for eight of the eleven Supreme Court Justices were revoked by Trump.

Now read on...

Register to sample a report

Register
Sign-in
Forgot your password?
Copyright 2025 GlobalSource Partners. All rights reserved. This report is prepared for GlobalSource Partners’ clients and may not be redistributed, reproduced, stored in a retrieval system, retransmitted or disclosed, in whole or in part, or in any form or manner, without the express written consent of GlobalSource Partners. This report is distributed simultaneously to our website and other portals used by GlobalSource Partners. The information herein was obtained from various sources and is believed to be reliable but GlobalSource Partners does not warrant its completeness or accuracy. Neither GlobalSource Partners nor any Country Analyst, officer or employee accepts any liability whatsoever for any direct, indirect or consequential damages or losses rising from any use of this report or its contents.