Brazil’s potential response to U.S. tariffs a key risk to watch: UBS

Published 14/07/2025, 12:00
Brazil’s potential response to U.S. tariffs a key risk to watch: UBS

Investing.com -- The potential response from Brazil to the recently announced 50% US tariffs is emerging as a significant risk factor that could impact markets in the coming week, according to UBS.

While macroeconomic risks currently remain low, any retaliatory measures from Brazil and subsequent US counter-responses could lead to further escalation, potentially increasing these risks.

The implications for Brazil’s 2026 presidential elections remain unclear amid this developing trade tension.

On the economic data front, Brazil’s May economic activity figures are expected to be released Monday, with forecasts pointing to 0% monthly growth (4.3% year-over-year). This would align with expectations that Brazil’s economic growth will begin slowing in the second quarter, with projections of 1.2% growth compared to 5.7% in the first quarter (seasonally adjusted annual rate).

Despite these concerns, some analysts maintain a positive outlook on the Brazilian real (BRL) versus the Mexican peso (MXN) or Colombian peso (COP), as well as on January 2027 bonds.

This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.

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