Brazil’s digital currency to debut by 2026 in reduced form without tokenization, surprising some in the market and raising questions
08/08/2025
In its next phase, Brazil’s Central Bank (BC) will drop plans to develop a complex distributed ledger technology (DLT) system for digital assets in the financial sector. Instead, the Drex project will focus on a more modest goal: creating a lien reconciliation solution that will pave the way for credit operations backed by a variety of collateral types—targeted for rollout in 2026.
The shift, seen as a major change in direction, will postpone the use of decentralized networks similar to those in cryptocurrencies—features that would have enabled programmable money, peer-to-peer lending, and other disintermediated financial transactions as originally envisioned.
The change in focus was first disclosed by BC Auditor Clarissa Souza during a panel at Blockchain Rio. Fabio Araujo, the BC’s Drex coordinator, later confirmed the move in an interview with Valor.
Mr. Araujo said the project will now be split into two timelines: one to deliver a service to the public in the short term without a decentralized network, and another to mature that technology over time. He explained that lien reconciliation will ensure an asset registered at a brokerage can be used as loan collateral, with all the different systems involved communicating with one another.
Originally, this was to be done using Hyperledger Besu, the DLT platform the BC chose in 2023 as Drex’s infrastructure. Besu is a permissioned protocol compatible with Ethereum smart contracts. The idea has now been shelved because developing all the needed solutions on that network proved unfeasible in the short term.
One of the biggest hurdles has been implementing a privacy solution for Drex within Hyperledger that preserves programmability and composability. Three tools were tested in the project’s first phase, with none fully satisfying the BC. Three more options emerged in the second phase.
Mr. Araujo said current privacy solutions are strong but require significant additional work, development, and adaptation before they can serve as the foundation for a decentralized financial system. “We found good privacy solutions, but apparently it’s not enough. We need to put this to the test,” he said.
Marcos Sarres, CEO of GoLedger—part of the Hyperledger Foundation—said there is no indication Hyperledger Besu will continue to be used when DLT returns to Drex’s roadmap. Mr. Sarres acknowledged that Besu was not ideal for the project due to its limitations.
“There are technologies already designed with privacy and scalability in mind—you don’t have to build them from scratch,” he said, citing Hyperledger Fabric as an example. Fabric recently upgraded to handle up to 200 million transactions per second, from 20 million previously. Brazil’s Federal Revenue Service already uses Hyperledger Fabric in its b-Cadastros database-sharing program.
The BC has yet to say what technology will power lien reconciliation for secured lending. Even members of the private-sector consortia currently testing Drex said they were surprised by the decision.
Marcos Viriato, CEO of Parfin—developer of one of Drex’s privacy solutions—suggested that asset transfers in the third phase could be processed through Brazil’s Pix instant payment system. “It’s like they’ve said before—they want integration with Pix,” he said.
At the end of July, the 16 private-sector consortia involved in Drex submitted reports on their tests of 13 tokenization use cases. The BC will release a comprehensive report on the second phase by October. It is unclear when the third phase—focused on collateralized lending—will begin, though it is expected later this year.
The tested use cases were far broader than what will now be delivered, including tokenized property sales. According to Araujo, DLT-dependent solutions will be discussed and developed in later phases, after lien reconciliation is in place.
The future involvement of the 16 current consortia is uncertain. Beyond technical challenges, Drex has also become a political flashpoint. The debate intensified when U.S. President Donald Trump backed legislation to bar the Federal Reserve from creating a central bank digital currency (CBDC), prompting Brazilian politicians to criticize Drex.
Companies in the Drex pilot expressed surprise at the sharp shift but said it would not derail tokenization efforts in Brazil. João Canhada, founder of crypto exchange Foxbit, said the tokenization market was already advancing independently of Drex. “Yes, there would have been more opportunities if Drex had been rolled out as previously discussed. But today’s tokenization market is not anchored to what Drex will deliver in the future,” he said.
André Portilho, head of digital assets at BTG Pactual—also part of the pilot—called the BC’s phased approach “pragmatic and correct” as it keeps the project and long-term vision intact while matching implementation to technology maturity.
João Aragão, technology and financial services innovation specialist at Inter bank, said the bank tokenized soybean trades and implemented interoperability features in Drex’s second phase. He stressed that the experience was not lost with the change in direction. “We’re all moving toward [future] virtual asset service provider licenses and have other projects we want to roll out. We will continue working on tokenization,” he said.
In a statement, the Brazilian Federation of Banks (Febraban) expressed confidence that the BC is developing Drex with the caution needed to meet efficiency, security, and stability requirements. “We remain firmly in the group supporting the creation of the Drex platform and are working within the ongoing Technical Cooperation Agreement,” it said.
*By Ricardo Bomfim, Valor — Rio de Janeiro
Source: Valor International
https://valorinternational.globo.com/
Vehicle exports to Argentina rose 156.5% in one year; industry revises forecast
08/08/2025
Brazilian automakers are bracing for a slowdown in domestic market growth. Thanks to rising exports to Argentina, however, they will be able to keep production levels steady.
Driven by stronger demand from its southern neighbor, the share of exports in Brazil’s auto industry has risen from 14% to 25% over the past year.
Noticing signs of a rebound in Argentina—Brazil’s top export destination for vehicles—automakers had been preparing since January to ramp up shipments. At the time, the National Association of Vehicle Manufacturers (ANFAVEA) projected a 7.8% increase in exports in 2025.
However, the recent performance exceeded expectations, said the ANFAVEA president, Igor Calvet. On Thursday (7), the industry association revised its forecast sharply upward, now projecting a 38.4% increase in vehicle exports this year.
In a year, vehicle sales from Brazil to Argentina surged 156.5% to 183,900 units. Argentina’s share of total exports rose from 35% to nearly 59%. Although sales to other neighboring markets such as Colombia and Chile also increased, Argentine demand was the key driver behind what ANFAVEA is calling a “surprising surge.”
From January through July, Brazil exported 312,100 vehicles, a 52.7% increase compared to 2024. Export revenue reached $8.33 billion, up 43.9% year-over-year.
According to Mr. Calvet, foreign demand has been the main reason automakers have expanded hiring in recent weeks. In just one month, 400 new positions were created. Total employment in the sector now stands at 109,100, up 4.4% over the past 12 months.
Stronger prospects for exports are helping the industry offset weaker domestic demand and maintain the production targets announced at the start of the year.
ANFAVEA lowered its forecast for domestic market growth in 2025 from 6.3% to 5%, or 2.765 million vehicles. However, it kept its projected increase in production at 8.4%, totaling 2.749 million units.
Not even the federal government’s Sustainable Car incentive program will be enough to reverse the trend. The program eliminated the Industrialized Products Tax (IPI) on a list of basic car models, leading to a 16.7% spike in sales of those vehicles in its first month.
The industry association points to high interest rates as one of the main factors behind weakening demand, especially for trucks. ANFAVEA holds a pessimistic outlook for the heavy-duty transport segment.
Since the beginning of the year, demand for trucks has fallen 4.1%, and the situation may deteriorate further in the coming months. The trade group revised its 2025 forecast for domestic truck sales from a 0.2% increase to an 8.3% drop. “Instability hurts us, and high interest rates kill us,” Mr. Calvet said.
But it’s not just the basic interest rate—which is now at its highest level since 2006—that threatens to slow production lines. According to Mr. Calvet, the U.S. government’s new import tariffs, in effect since Wednesday (6), will also impact the truck market. He noted that nearly all of Brazil’s exports to the U.S. rely on trucking to reach the ports.
The tariff hike announced by President Donald Trump is also expected to hurt exports of components such as engines. In that case, the import tax jumped from 2.5% to 27.5%. Based on ANFAVEA’s estimates, this could cost the industry $268 million if current shipment volumes continue, which the leader doubts will happen.
While presenting the industry’s results, Mr. Calvet again criticized the growing volume of Chinese vehicle imports. Chinese car sales in Brazil are now approaching those from Argentina.
From January to July, 87,800 Chinese vehicles were sold in Brazil—up 41.2% from the same period in 2024. Vehicles imported from Argentina totaled 121,400, an 11% increase year-over-year.
“Imports from Argentina are positive because we also export there, but we sell nothing to China,” he pointed out.
At the same time, Mr. Calvet praised a recent decision by Brazil’s Foreign Trade Chamber (CAMEX), which limited the import tax exemption period for semi-knocked-down (SKD) vehicles to six months. BYD, which is preparing to launch local production, had requested a longer exemption of one year. The CAMEX also imposed quotas on SKD imports, which will apply to all brands, including ANFAVEA members.
*By Marli Olmos — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Government analyzes export data to fine-tune measures while exploring talks on big tech regulation, critical minerals, and data center policy
08/08/2025
With a contingency plan already on President Lula’s desk, Brazil’s economic team is now assessing the situation of each exporter individually to fine-tune measures aimed at offsetting the impact of the 50% tariff announced by the United States on Brazilian goods. The plan is expected to be presented by Tuesday.
In a parallel effort, Vice President and Minister of Development, Industry, Trade and Services (MDIC) Geraldo Alckmin has hinted at possible avenues for bilateral talks, including regulation of big tech companies, access to critical minerals, and data center policy.
Valor has learned that he details of the plan were still being defined on Thursday (7), with calculations underway to assess the fiscal impact. There was no decision yet on the amount of credit to be offered or whether the Reintegra program—which grants tax credits to exporters—would be expanded to cover affected companies.
The review is delayed as the government examines each exporter individually to decide which support measures to implement. The MDIC prepared a detailed report on the tariff’s impact by company, which was under review at the Finance Ministry.
For now, expanding Reintegra remains under consideration. The program currently grants 0.1% credit for medium and large companies and 3% for small and micro enterprises. Industry representatives are lobbying to set the rate at 3% for all exporters. The issue was raised during a meeting between Mr. Alckmin and Haroldo Ferreira, president of the Brazilian Footwear Industry Association (ABICALÇADOS), who stressed the program’s “importance for companies selling to the U.S. market.”
Another businessperson said that Reintegra was well on the way to being included in the initial measures. However, there was uncertainty about the criteria for choosing the companies that would benefit.
Another measure under discussion is easing drawback rules, which suspend taxes on imported components used in products bound for export. Officials are weighing longer deadlines for companies to fulfill their export commitments.
Mr. Alckmin noted that the need for support varies even within sectors. In fisheries, for example, tilapia is sold domestically, while tuna is exported—making the latter more vulnerable to the new tariffs. Measures will therefore target firms with greater export exposure to the U.S.
The vice president said the government is acting on two fronts: implementing a contingency plan to protect jobs and production, and negotiating to exclude as many products as possible from the tariff list. Currently, about 38% of Brazilian exports to the U.S. are subject to the 50% duty.
Mr. Alckmin also met with U.S. chargé d’affaires Gabriel Escobar, reiterating Brazil’s opposition to the tariff hike and offering dialogue on non-tariff issues such as big tech regulation, critical minerals, and data centers. He argued that the measure would harm the U.S. by raising consumer prices, disrupting supply chains, and creating legal uncertainty. Mr. Escobar also visited Congress on Thursday.
Private-sector engagement is part of the strategy. On Wednesday, Mr. Alckmin met with Abrão Neto, head of the American Chamber of Commerce for Brazil (Amcham Brasil), which will work with the Brazilian Trade and Investment Promotion Agency (ApexBrasil) to intensify outreach in Washington.
Measures under consideration include credit lines, government purchases of food for school lunch and prison programs, job support initiatives, and a possible Reintegra expansion. Behind the scenes, officials are careful to avoid measures that would worsen public finances, particularly the primary balance—revenues minus expenditures excluding interest payments—which is the key fiscal target.
While credit provision is seen as less risky, high subsidies are a concern. The goal is to prevent any perception that the crisis is a pretext for higher spending in a pre-election year. Measures with budgetary impact could bypass the fiscal target but might increase gross public debt.
Officials are also mindful that U.S. President Donald Trump could impose further trade restrictions and want to preserve the option to respond if that happens.
*By Lu Aiko Otta, Sofia Aguiar and Ruan Amorim — Brasília
Source: Valor International
https://valorinternational.globo.com/
Divestment agreement was signed in 2014 to address antitrust concerns on CSN’s acquisition of non-controlling shares in Usiminas
08/07/2025
On Wednesday (6), the Administrative Council for Economic Defense (CADE) Tribunal reviewed an appeal filed by Usiminas questioning whether Companhia Siderúrgica Nacional (CSN) had complied with the antitrust watchdog’s order to divest the shareholding it held in Usiminas. The regulator has yet to calculate the potential fine to be imposed on CSN.
By majority vote, the appeal filed by Usiminas was deemed moot due to a subsequent court ruling. However, CADE gave its technical team five days to determine the amount of the fine CSN could face, using as a reference the criteria set by the Federal Regional Court of the 6th Region (TRF-6). Once the fine is calculated, the steelmakers will have the opportunity to comment, and the matter will return to the Tribunal for final deliberation.
The divestment agreement was signed in April 2014 to address antitrust concerns related to CSN’s purchase of Usiminas shares that were not part of the controlling block. The deadline for divestment was extended in 2019 and renegotiated in 2022, when it was amended to allow an open-ended timeline for CSN to sell its stake in Usiminas.
On June 25, 2025, in light of a court ruling ordering CSN to sell its stake in Usiminas, the CADE Tribunal gave the company 60 days to submit a divestment plan to be carried out “as quickly as possible.” The final deadline was set for September 1.
In the appeal ruled on Wednesday (6), Usiminas argued that the decision was contradictory: although it acknowledged CSN’s breach of the agreement, it also granted the company a 60-day deadline to submit a plan. Usiminas requested that a fine be imposed and a court-appointed administrator be assigned to oversee CSN.
CSN told the antitrust regulator that it had reduced its stake in Usiminas as ordered. Nevertheless, both CADE’s specialized Federal Prosecutor’s Office and the Federal Prosecution Service (MPF) recommended enforcement measures, including fines and judicial oversight, due to the delay in the divestment and the TRF-6’s court ruling.
The prevailing opinion was that of Commissioner Victor Oliveira, who proposed a five-day deadline for calculating the fine, using judicial benchmarks. His position was supported by Commissioners Diogo Thomson, Camila Pires Alves, and José Levi.
Dissenting votes came from the rapporteur, Commissioner Gustavo Augusto, and Commissioner Carlos Jacques. While the votes differed little in practical terms, they diverged on procedural grounds.
What the companies say
In a statement, CSN said that the antitrust regulator’s Tribunal recognized that the company had fully complied with its obligation to sell its stake in Usiminas, and that “no penalties were imposed nor was any fine determined,” noting that this aspect is still subject to a future decision by the Tribunal.
Usiminas stated, also in a note, that “the sale of CSN’s stake in the company, more than 11 years after the agreement signed with CADE, confirms that the shareholding was acquired illegally and in violation of Brazilian law.” According to Usiminas, it was only after judicial proceedings that CSN gave up on keeping the shares.
By Beatriz Olivon, Valor — Brasília
Source: Valor International
Mines and Energy Ministry said critical minerals to remain part of economic, technological cooperation agendas
08/07/2025
Amid the federal government’s efforts to negotiate with the United States a reduction in import tariffs on Brazilian products, the Ministry of Mines and Energy (MME) said that proposals involving Brazil’s critical minerals are under consideration.
“Proposals for international cooperation on this topic are undergoing technical analysis by multiple ministries and remain under development within the scope of diplomatic dialogue,” the ministry said in a statement to Valor, when asked what, in concrete terms, Brazil could offer the U.S. in the area of critical minerals as part of the tariff discussions.
“All negotiations are conducted following current legal frameworks and aligned with the guidelines of Brazilian mineral policy, while respecting national sovereignty over resources and ensuring local value creation,” the statement added.
The ministry also said that “critical minerals will continue to be part of economic and technological cooperation agendas between Brazil and its strategic partners, in a balanced and non-exclusive manner.”
This week, two public remarks on the topic raised questions about the federal government’s stance.
On Monday (4), in an interview with BandNews, Finance Minister Fernando Haddad said: “We have critical minerals and rare earth elements. The United States does not have abundant reserves of these minerals, so we could establish cooperation agreements to produce more efficient batteries.” His comment was offered as an example of topics that could be brought to the negotiating table.
On Tuesday (5), however, President Lula stated in Brasília, during a meeting of the Sustainable Economic and Social Development Council: “We are building a national policy that will ensure that the exploitation of these resources benefits the Brazilian people. If these rare earths and critical minerals are found here in Brazil, they belong to us. And we will not allow them to be exploited the way other minerals have been for so long.”
In its note to Valor, the Ministry of Mines and Energy emphasized that Brazil is seeking to “strengthen its international role through partnerships that respect national legal frameworks, promote local industrialization, and generate tangible benefits for Brazilian society.”
According to the Energy Act of 2020—the current U.S. law on the subject—critical minerals are defined as those essential to the economy and national security; those vital to the manufacturing of products whose absence would have significant consequences; and those whose supply is vulnerable to disruption.
The U.S. lists 50 minerals as critical, many of which are used in high-tech equipment, electric vehicle batteries, defense applications, and more.
In the 2025 data release by the U.S. Geological Survey (USGS), Brazil appears as the country with the second-largest reserves of critical minerals, behind only China. However, Brazil’s production remains limited.
For manganese, Brazil has the world’s fourth-largest reserves. Its nickel reserves rank third globally, and for niobium, Brazil holds the top spot.
There has yet to be a formal statement from the U.S. indicating interest in including Brazilian critical minerals in tariff negotiations.
However, the topic has gained traction following a meeting between Gabriel Escobar, the top U.S. diplomat in Brazil, and executives from mining companies operating in the country. During the meeting, the U.S. reiterated a message it has conveyed for several years: its interest in cooperating with Brazil in the area of critical minerals.
The MME said it plans to launch a National Policy on Critical and Strategic Minerals in 2025, to expand geological research, increase value-added production, foster innovation, and attract investment.
*By Marcos de Moura and Souza, Valor — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Government accuses Washington of violating core multilateral trade rules with 50% duties on Brazilian exports
08/07/2025
The administration of President Luiz Inácio Lula da Silva formally requested consultations with the U.S. at the World Trade Organization (WTO) on Wednesday (6), initiating a dispute over the sweeping tariff hikes imposed by President Donald Trump on Brazilian exports. In a joint statement, the Ministry of Foreign Affairs (Itamaraty) and the Ministry of Development, Industry, Trade and Services (Mdic) said the request challenges U.S. measures adopted on April 2 and July 30 that together apply tariffs of up to 50% on a range of Brazilian goods.
According to the Lula administration, the tariffs “flagrantly violate core commitments” the U.S. has made under WTO rules, including the most-favored-nation (MFN) principle and tariff ceilings negotiated within the organization.
The 50% tariff was imposed under U.S. legislation, including the International Emergency Economic Powers Act and Section 301 of the 1974 Trade Act.
The WTO consultations, to be held in Geneva, are the first formal step in the organization’s dispute settlement process and are intended to promote a “negotiated solution” before a potential panel is established. A date and location for the consultations will be agreed upon by both parties in the coming weeks.
“The Brazilian government reaffirms its openness to negotiation and hopes the consultations will contribute to a resolution of the matter,” the ministries said.
Despite the formal request, Lula administration officials privately admit they do not expect a concrete result from the WTO proceedings. However, they view the move as an important geopolitical gesture. According to Valor sources, the main objective is to defend multilateralism and underscore the need for a rule-based international trade system in the face of U.S. unilateralism.
The possibility of bringing the issue to the WTO has been under consideration since the beginning of Trump’s second term, when he launched a new round of global tariff hikes. From the outset, Brazilian officials saw it as unlikely that the U.S. would comply with any WTO ruling and thus treated the move as more symbolic than substantive.
Brazil has also raised concerns about U.S. influence within the WTO, citing the presence of several senior officials linked to the U.S. government—reducing confidence in a favorable outcome.
Nonetheless, the Lula administration reached a consensus to proceed with the WTO filing after Mr. Trump’s July announcement of the 50% tariff, which took effect Wednesday.
At the WTO General Council meeting in Geneva in late July, Brazil reiterated its commitment to defending the multilateral trading system and condemned the use of arbitrary tariffs that violate core WTO principles and threaten the global economy.
Brazil also called for renewed efforts to reform the multilateral trading system and restore the WTO’s role as a venue for dispute resolution and the defense of its members’ legitimate interests through dialogue and negotiation. Following Brazil’s statement, 40 countries—including the EU’s 27 member states—expressed support for the rules-based global trade framework and backed the call for structural reform of the organization.
The WTO was established in 1995 following the Uruguay Round of negotiations under the General Agreement on Tariffs and Trade (GATT), which governed multilateral trade from 1948 to 1994. The WTO’s core principles include non-discrimination, predictability, fair competition, bans on quantitative restrictions, and special treatment for developing countries.
*By Sofia Aguiar and Renan Truffi — Brasília
Source: Valor International
https://valorinternational.globo.com/
French-Brazilian chamber says delay risks lost opportunities as global alliances shift
08/05/2025
The U.S. decision to impose broad tariffs on global imports underscores the urgency for Brazil to strengthen its trade relations—starting with ratifying the long-pending European Union–Mercosur agreement, said Thierry Besse, president of the France-Brazil Chamber of Commerce in São Paulo (CCIFB-SP).
“Everything happening now only reinforces the urgent need to deepen economic integration between the European Union and Mercosur,” said Mr. Besse, a French-Brazilian who also serves as institutional director of Vinci Concessions, an airport and highway operator. The interview took place on July 30, just minutes after U.S. President Donald Trump signed a decree imposing 50% tariffs on Brazilian products and three days after the U.S. and EU reached a separate trade deal that set tariffs at 15% for most European exports.
“We urgently need to advance integration between these blocs—and especially, in our case, between France and Brazil—because there is predictability, trust, long-term vision, and partnership here,” Mr. Besse said.
A longtime advocate of the EU-Mercosur deal, Mr. Besse emphasized that the agreement would benefit both regions, particularly France–Brazil trade. “We hope for swift ratification, because time is passing and the need for this agreement is increasingly clear.”
The São Paulo regional office is one of four in Brazil under the France-Brazil Chamber of Commerce, and it represents more than 70% of the chamber’s 500 member companies. According to Mr. Besse, a strong majority supports the EU-Mercosur deal.
The agreement would create a market of over 750 million consumers—about 10% of the global population—and a combined GDP of around $22 trillion, or roughly 20% of global GDP.
However, France remains the biggest obstacle to ratification. That stance may shift, Mr. Besse noted, as French President Emmanuel Macron and other European leaders grow increasingly frustrated with the recent EU-U.S. trade pact.
“The world seems increasingly volatile and irrational. In this challenging environment for businesses, it’s clear that long-term partnerships and trusted relationships matter more than ever. The Chamber, which just celebrated its 125th anniversary, is a living testament to the strength of the France–Brazil relationship,” said Mr. Besse, without directly commenting on the U.S. decision.
“French investment in Brazil and bilateral trade have evolved largely independent of political cycles. French companies invest in Brazil with a long-term outlook, which is very healthy for economic relations between our countries.”
According to Mr. Besse, signs point to continued growth in the relationship. Despite Brazil’s economic volatility, French companies and investors have maintained their presence. Chamber data shows that 1,300 French subsidiaries currently operate in Brazil, employing over 500,000 people and generating more than €61 billion in revenue in 2024 (approximately R$390 billion).
“That’s double Vale’s 2024 revenue,” he said, referencing the Brazilian mining giant’s R$206 billion net revenue, “and almost the size of Petrobras’s,” which posted R$490.8 billion the same year. “It’s a very significant volume.”
Mr. Besse described the current phase of bilateral economic relations as highly positive, with Brazil becoming a “privileged destination” for French investment. “France is not focused on just one sector. French companies are present across the economy—from aerospace and defense to retail, infrastructure, energy, and luxury goods.”
According to Brazil’s central bank, France was the country’s third-largest foreign investor in 2023, with a stock of $66.3 billion—just behind Spain ($66.7 billion) and the United States ($272.8 billion). The Chamber added that Brazil is the second-largest emerging market for French investment, trailing only China.
Among the sectors where French investment is strongest, Mr. Besse highlighted energy transition. French companies have been building and financing solar plants—particularly in northeastern Brazil, but not exclusively—and are also active in wind energy.
Despite the already strong French presence, Mr. Besse sees room for growth—especially in trade. In 2024, trade between the two countries totaled $9.1 billion, which the Chamber still considers “modest.” President Lula has even called the figure “a shame,” given the size of both economies.
According to Mr. Besse, the EU-Mercosur deal could help unlock this potential—particularly for small and medium-sized enterprises (SMEs), which face the biggest barriers to entering foreign markets. “There is still great potential for increased exports by French companies to Brazil—and vice versa.”
Initially, he noted, the deal would facilitate exports by industrial-sector SMEs, thanks to the gradual reduction of tariffs between the blocs. Over time, it could lead to local investments and new production facilities, which would “generate jobs and income.”
*By Michael Esquer — São Paulo
Source: Valor International
https://valorinternational.globo.com/
Executive aviation firm signs deal to acquire up to 53 aircraft from U.S. startup in a $240m agreement
08/05/2025
Líder Aviação, one of Latin America’s largest executive aviation firms, has signed a strategic partnership with U.S.-based startup Beta Technologies to represent and operate its electric aircraft in Brazil, including both eVTOLs (electric vertical takeoff and landing vehicles, commonly known as “flying cars”) and eCTOLs (electric conventional takeoff and landing aircraft). The move positions Beta to compete directly with Eve, Embraer’s urban air mobility subsidiary.
CEO Júnia Hermont said the agreement grants Líder exclusive rights to sell Beta’s aircraft in Brazil, and also establishes the company as the authorized maintenance hub for Beta’s fleet in the country. As part of the deal, Líder signed a firm order for three aircraft, along with options for an additional 50 units. At list prices, the full order could total up to $240 million.
“We’ve spent over six years evaluating new types of aircraft for urban air mobility. We’ve reviewed many proposals, including from companies that failed to move forward. Two years ago, we deepened our analysis and hired a technical team to assess both performance and feasibility,” Ms. Hermont explained.
She emphasized that while the agreement represents a firm partnership with Beta, it does not exclude the possibility of adding other eVTOL models to Líder’s fleet in the future, including those developed by Eve. Líder currently represents HondaJet and also operates Embraer aircraft.
Unlike Beta, Eve does not work with third-party sales representatives in Brazil and manages all commercialization in-house. This gave Líder an opening to strike a deeper partnership with Beta.
Brazil is seen as a prime market for eVTOLs, given the country’s vast executive aviation fleet and its urban mobility infrastructure challenges. Brazil currently has the second-largest general aviation fleet in the world, behind only the United States, with over 10,000 aircraft in operation.
Beta’s entry into the Brazilian market through Líder marks its first official move into the home turf of Eve.
The startup is currently developing two aircraft: the CX300 (eCTOL), with a list price of approximately $3.75 million, and the ALIA 250 (eVTOL), priced at around $4.75 million. Both aircraft have similar designs and can seat up to five passengers plus a pilot.
Ms. Hermont highlighted the broader impact of electric aircraft technology: “The future is clean energy. The aviation sector has committed to net-zero carbon emissions by 2050. We must act now,” she said.
In May, Líder became the first executive aviation company in Brazil to complete a flight using sustainable aviation fuel, with a 10% SAF mix powering a helicopter. The fuel was purchased from Vibra, the first distributor to make SAF commercially available in Brazil, imported from Europe.
Beyond environmental gains, electric aircraft are expected to significantly reduce operating costs compared to combustion-engine aircraft.
While Líder is still studying the best model for operating electric aircraft in Brazil, the company envisions a range of use cases: airport-to-airport routes, urban and regional flights, air ambulance services, cargo delivery, and on-demand corporate travel. The new aircraft are seen as complementary to its existing fleet of helicopters and fixed-wing aircraft.
The CX300 has already undergone crewed test flights in New York, and Beta expects U.S. Federal Aviation Administration (FAA) certification by 2026. The ALIA 250 is projected to receive FAA approval in 2027. Given the strong cooperation between Brazil’s aviation authority, ANAC, and the FAA, Brazilian certification is expected to follow shortly thereafter.
Eve, for its part, also aims to certify its eVTOL in Brazil by 2027 and is working with the FAA to secure dual certification.
After a wave of investor enthusiasm in the eVTOL sector, which saw hundreds of startups emerge worldwide, the industry is entering a consolidation phase. Some ventures have collapsed or stalled, while others, like Eve and Beta, have reached more advanced development stages and secured substantial funding.
Separately from the Beta partnership, Líder is set to officially open its new hangar at Campo de Marte airport, in São Paulo, on Tuesday (5). The terminal is seen as a cornerstone of executive aviation’s strategy to absorb demand displaced from the Congonhas airport following the arrival of a new private concessionaire.
*By Cristian Favaro — São Paulo
Surce: Valor International
https://valorinternational.globo.com/
Textile and furniture companies without scale face growing risks of layoffs, revenue losses
08/05/2025
Of the 74,000 mid-sized companies currently operating in Brazil, around 10,800 (14.6%) export goods and are now exposed to the market upheaval triggered by the U.S. tariff hike, according to estimates from Fundação Dom Cabral (FDC). Roughly 80% of these exporters are part of the manufacturing sector—one of the segments hardest hit by the measures enacted by Donald Trump.
Professor Paulo Roberto Feldmann of the University of São Paulo’s School of Economics, Business Administration, Accounting and Actuarial Science (FEA-USP) sees three distinct scenarios among the sectors most vulnerable to the tariff shock. In agribusiness export chains—such as coffee, cocoa, meat, and fish—large, efficient groups can redirect shipments to Asia or Europe and, if needed, shift part of their output to the domestic market, helping stabilize prices. However, in sectors like textiles and furniture, which are dominated by mid-sized firms lacking scale or export consortia, the tariffs leave them cornered, with increasing risks of layoffs and revenue losses.
Machinery falls somewhere in between, according to Mr. Feldmann. Manufacturers of agricultural equipment benefit from strong domestic demand and advanced technology, while producers of industrial machinery are losing ground in a shrinking manufacturing base. Mr. Feldmann warns that without cost-cutting, regulatory streamlining, and support for export consortia, the tariff hike could accelerate Brazil’s deindustrialization and deter investment.
FDC professor Eduardo Menicucci modeled the impact of the tariff hike using a real case from Pará: an açaí producer that earns a third of its revenue from U.S. sales. “The increase in the final price for American consumers would be 36%, and that can’t be fully passed on by the importer,” he pointed out. “This creates a very narrow margin for maneuvering, especially with limited domestic demand and no capacity to store the entire output in cold storage.”
Some sectors may be able to build inventory, Mr. Menicucci noted, while others—like furniture—will likely be forced to shut down production lines for the export market. Nearly one-third of Brazil’s furniture and mattress exports and 40% of exports of furniture-related raw materials, inputs, and technology go to U.S. consumers, according to the Brazilian Furniture Industry Association (ABIMOVEL). Some companies are already seeing order cancellations, shipment suspensions, production cuts, and revenue losses tied directly to the Trump administration’s tariff hike.
One example is Móveis Serraltense, a furniture company based in São Bento do Sul, which granted two weeks of collective leave to its 140 employees in July. In 2024, 80% of the company’s production went to the United States; in the first half of 2025, that figure dropped to just 30%. “For the next three months, we’re projecting production idle time of 40% to 50%,” says CEO Daniel Lutz.
“We plan to retain all jobs, perhaps by reducing the workweek by one day without cutting wages, to save on electricity and inputs,” Mr. Lutz added. Serraltense is exploring new markets in Europe and Latin America, but the CEO warns that diversification will take time.
In the furniture hub of Arapongas, Paraná, leather upholstery manufacturers are also feeling the pressure. At Toro Bianco, a family-run business with 100 employees, scheduled shipments for August were canceled, said director Marcela Carandina.
In Nova Prata, Rio Grande do Sul, nearly all of Artemobili’s production is exported to the U.S. Due to a wave of order cancellations, the company put its 360 employees on paid furloughs. “This doesn’t just create uncertainty for our company, but for the entire community, where hundreds of families rely on the furniture sector to make a living,” said CEO Gabriel João Cherubini.
The Santa Catarina furniture cluster—the country’s largest exporter of furniture—is heavily dependent on U.S. clients. Its 398 companies, located in São Bento do Sul, Campo Alegre, and Rio Negrinho, employ around 7,000 people and generated $123.4 million in exports last year, representing 14% of Brazil’s total furniture exports. The U.S. accounted for 62% of that total ($77.1 million).
“The new tariffs erode the competitiveness of Brazilian furniture, undermining a bilateral trade relationship that our companies have built through efficiency, innovation, and sustainability,” said Luiz Carlos Pimentel, president of the São Bento do Sul Furniture Industry Association (Sindusmobil). He calls for the continuation and strengthening of bilateral trade negotiations and stresses the urgent need for measures to support Brazil’s export-oriented industries.
The tariff hike comes at a fragile time for mid-sized firms, as highlighted by early findings from FDC’s annual Market Radar study, shared in advance with Valor. Between 2021 and 2024, the number of mid-sized companies entering court-supervised reorganization more than doubled, from 197 to 416. The study, based on data from 10,400 mid-sized companies, shows that these firms saw a 10% drop in net income in 2024 compared to 2022.
“If the tariffs are not eased, some of these companies will be in very precarious situations, especially those that are already in debt,” Mr. Menicucci said. “For those that are already putting workers on paid furloughs, the next step will likely be layoffs, and I don’t know of any mid-sized firm with the financial reserves to handle that.”
Structural issues like lack of planning and limited access to capital continue to hamper mid-sized businesses in Brazil’s still-low-internationalization economy. An FDC study conducted in 2023 found that only 11% of mid-sized companies had management maturity levels considered excellent. “That points to a major gap, but also a huge opportunity,” said professor and researcher Diego Marconatto. He noted that just 13% of Brazil’s mid-sized companies have subsidiaries abroad, even though 85% operate under a B2B model.
The immediate impact of the tariff hike may be minimal for firms without an international presence, but over the medium term, ripple effects will likely hit suppliers to major exporters. “In footwear, for instance, the supply chain is very dynamic and competition is fierce, which means international competitors can quickly replace Brazilian products,” Mr. Marconatto said. “We’re likely to see layoffs in that and other sectors.”
*By Dauro Veras — Florianópolis
Source: Valor International
https://valorinternational.globo.com/