TCU warns government of growing risk of bailing out state-run companies

Review of 2025 government accounts points to worsening financial conditions at companies and insufficient oversight by ministries

Brazil’s Federal Court of Accounts (TCU) has warned the federal government of a growing risk that the Treasury will have to provide financial support to non-dependent state-owned companies in the coming years.

In its review of the president’s 2025 accounts, approved last week, the TCU said the worsening financial condition of several federal companies, combined with insufficient oversight by the ministries responsible for them, increases the likelihood of new Treasury injections.

The warning is based on audits of 11 non-dependent federal state-owned companies—entities that do not rely on the Treasury to fund their operations—including Brazil’s postal service Correios, Eletronuclear, the Brazilian Nuclear and Binational Energy Holdings Company (ENBPar), airport operator Infraero, asset management company Emgea, the Brazilian Mint, PortosRio, and federal port authorities known as Companhias Docas.

According to the court, some companies already pose an immediate risk to public finances, including Correios, while others have accumulated problems that, if left unaddressed, are likely to worsen and could require federal support over the medium and long term.

Non-dependent federal state-owned companies ended 2025 with a primary deficit of R$5.1 billion. Although the result improved from the R$6.7 billion deficit recorded in 2024, it maintained the deteriorating trend seen since 2023, when the group of companies began posting negative results, with a deficit of R$700 million, after surpluses of R$3 billion in 2021 and R$4.8 billion in 2022.

“The gradual reversal from positive results to growing deficits over the 2023-2025 period demonstrates a deterioration in these companies’ ability to finance themselves and adds pressure to the consolidated fiscal effort,” the court said.

According to the TCU, the financial deterioration of state-owned companies stems from a combination of factors, including loss of competitiveness, declining revenues, rigid cost structures, and reliance on one-off, non-recurring measures, such as capital injections, financial income, and asset sales, to support results.

The report also identified shortcomings in oversight by the ministries responsible for the companies, which it described as a “systemic deficiency.” According to the TCU, monitoring has not been sufficient to identify and correct problems proactively, increasing the risk that liabilities will eventually become obligations for the federal government.

Among the cases cited is Correios. The TCU described the postal service’s situation as the most serious and urgent among the companies analyzed. According to the court, the company is operating in a state of technical insolvency, has posted losses since 2022, and depends on government-backed borrowing to maintain operations. A financing agreement signed in 2025, worth R$12 billion and guaranteed by the federal government, requires a minimum government contribution of R$6 billion by 2027.

The TCU also warned of contagion risks among companies operating in the same sector. In the nuclear segment, Eletronuclear was classified as posing a high fiscal risk because of debts related to the construction of the Angra 3 nuclear plant and structural deficits arising from the operation of the Angra 1 and Angra 2 plants. According to the court, the company posted losses in 2025 and lacks sufficient resources to meet short-term obligations without resorting to new borrowing.

The TCU also highlighted that Eletronuclear’s situation directly affects Indústrias Nucleares do Brasil (INB) and puts pressure on ENBPar. In the auditors’ assessment, there is an immediate risk that Treasury injections will be needed to cover current and capital expenditures of companies within the group.

Federal port authorities present a mixed picture, with risks ranging from medium to high. Among them, PortosRio was identified as the most concerning case. The company has negative equity, insufficient cash generation, and already received R$1.14 billion in Treasury injections in 2024. Labor liabilities further aggravate the situation, as the number of active lawsuits has increased, with provisions totaling R$435 million, “driven by the obsolescence of a compensation and career plan that has remained unchanged for more than 15 years.”

The Port Authority of Rio Grande do Norte (Codern) was also found to be in a fragile position, marked by consecutive operating deficits from 2021 to 2024, equity restored only through an extraordinary Treasury capitalization in 2025 and an imminent risk of revenue losses. The remaining port authorities face medium risk, with vulnerabilities stemming from chronic underinvestment and rising personnel costs.

“A cross-cutting risk factor affecting all port authorities is the Portus pension fund liability, which has a significant actuarial deficit at each company and lacks restructuring plans under adequate supervision by the Ministry of Ports and Airports,” the report said.

The Brazilian Mint, meanwhile, was classified as medium risk. According to the court, the company has sustained positive results primarily through financial income generated by accumulated reserves, a strategy that may be exhausted in the coming years.

Emgea, in turn, is in a more comfortable financial position but will face uncertainty regarding its sustainability after December 2026, when its main source of revenue, linked to the management of housing-related claims from the Wage Variation Compensation Fund (FCVS), comes to an end.

Brazilian Mint relies primarily on financial income from reserves to sustain positive results

Infraero was classified as low risk in the short term. Even so, the TCU warned of possible structural deterioration over the medium term because of operational restrictions imposed on Santos Dumont Airport, its only profitable asset.

“In the company’s own projections, maintaining these restrictions represents cumulative losses of R$983 million by 2030 compared with a scenario of greater operational flexibility, making dependence on Treasury support likely after 2030,” the court said.

Economist Alexandre Andrade, director of Brazil’s Independent Fiscal Institution (IFI), said the economic and financial deterioration of federal state-owned companies currently represents a highly significant fiscal risk for the federal government. First, because a company may be reclassified as a dependent state-owned enterprise, becoming part of the federal budget and increasing pressure on spending limits established under Brazil’s fiscal framework.

The second risk involves capital injections, which also place pressure on spending caps. “These injections constitute primary expenditures and can limit room for other spending within the fiscal framework’s caps. Even if the contributions are structured so that they are not directly recorded in the primary balance, they may increase gross debt through the issuance of government bonds,” said Andrade.

The economist said the lack of monitoring indicators for state-owned companies can encourage management to take excessive risks or expand expenditures, especially payroll costs, beyond cash-generation capacity, on the assumption that the National Treasury will rescue the company if necessary. “In that case, society as a whole would bear the cost,” the IFI director said.

In a statement, Codern said it continues to generate sufficient resources to fund operations and meet its obligations on a regular basis. The company also said accounting results in recent years had been affected by non-cash expenses, including depreciation, provisions and monetary adjustments, which affect accounting results but not operational capacity or liquidity. Regarding the capital injection received in 2025, the company said the capitalization helped “restore the company’s equity structure,” while it continues to implement measures to increase operational efficiency, strengthen revenues and improve results.

Codeba said the company is profitable and has consistently distributed dividends to shareholders. “In 2025, it achieved a record liquidity position of R$331.2 million, reflecting excellent operational management and the strategic recovery of assets,” the company said.

The other state-owned companies contacted did not respond to a request for comment. The Ministry of Management and Innovation in Public Services, which oversees the Secretariat for State-Owned Enterprises, also did not respond.

  • By Giordanna Neves and Jéssica Sant’Ana — Brasília
  • Source: Valor International

https://valorinternational.globo.com/

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World Cup has limited impact on Brazil’s inflation, study finds

Price increases linked to major sporting events are concentrated in a few categories, typically fade as tournaments end

 

 

 

Prices for lodging services, parking, and some food products may rise during major sporting events such as the FIFA World Cup and the Olympic Games, but the effects generally do not persist beyond the duration of the competitions, according to a study by Warren Investimentos.

According to Andréa Angelo, the firm’s inflation strategist, such events may add roughly 0.05 percentage point to Brazil’s headline inflation rate. Food prices account for 0.01 percentage point of the effect, while industrial goods and services each contribute about 0.02 percentage point.

“The impact exists, is statistically robust for certain items, and is consistent with the temporary increase in demand associated with tournaments. Even so, it is diluted within the aggregate index and does not have a permanent nature, suggesting that the effects on Brazilian inflation tend to be limited to the period of the event,” the study said.

To reach its conclusions, Angelo analyzed the behavior of items included in Brazil’s Extended Consumer Price Index (IPCA) during FIFA World Cups and Olympic Games held since 2010. Using statistical models, she calculated coefficients measuring each item’s sensitivity to major sporting events, their effect on prices, and their contribution to the IPCA.

The analysis identified statistical correlations between the events and price increases in 16 components of Brazil’s official inflation index. However, the overall impact on inflation was found to be small and temporary.

According to the study, some food products are among the items that tend to post the largest price increases during major sporting events. Bell peppers showed an estimated impact of 7.6 percentage points on prices, followed by cilantro at 5.1 percentage points and guava at 4.2 percentage points.

Angelo noted that although these products stand out statistically, it is difficult to find a logical explanation for why their prices would rise during such events. Despite the increases, these items carry very little weight in household consumption baskets and have virtually no effect on the IPCA, according to the study.

Among the most sensitive items, only lodging services—showing an estimated impact of 4.2 percentage points—have a measurable effect on inflation, contributing around 0.02 percentage point to the index. According to the economist, this category may be influenced by travel undertaken to visit friends and relatives to celebrate or watch matches together.

The survey also identified a second group of products with moderate sensitivity to major sporting events. This category consists primarily of industrial goods, including personal computers (0.89 percentage point), men’s underwear (0.74 percentage point), and jewelry (0.71 percentage point).

Some of these findings have more intuitive explanations. Parking services (0.60 percentage point), for example, tend to experience stronger demand as more people travel to watch games. Meanwhile, products such as fruit juice (0.49 percentage point) and cookies (0.45 percentage point) may reflect increased consumption by fans during tournaments.

Angelo emphasized that sporting events can influence price movements, but not enough to materially affect inflation trends or generate a meaningful impact on the IPCA.

She also acknowledged that the vacation season often coincides with the timing of major competitions and may influence some of the results, particularly in categories such as lodging, where demand typically increases. Nonetheless, she argued that there are no other significant factors capable of fully explaining the patterns identified in the study.

*By Grace Vasconcelos — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Central Bank may slow cuts after lowering Selic to 14.25%

Economists say reference to 2028 inflation horizon raised doubts about next steps of Brazil’s Monetary Policy Committee

 

 

Brazil’s Central Bank cut the Selic base rate by 25 basis points to 14.25% at its Monetary Policy Committee (Copom) meeting on Wednesday (17), but the accompanying statement raised questions among economists about the authority’s next steps.

As Valor had reported earlier in the week, most financial-market participants expected the rate cut. What they did not expect was a statement referring to the quarter after the so-called “relevant horizon,” the period the Central Bank uses as a benchmark for its decisions and that reflects the time needed for monetary policy to take effect. That horizon had been the fourth quarter of 2027, but the statement mentioned the first quarter of 2028.

“It is commendable to work with an alternative scenario, but if the Central Bank usually looks at the relevant horizon, why does it mention the following quarter? In practice, the authority extended that horizon. This raises the question of whether the relevant horizon is now the one that allows it to cut rates,” said Gino Olivares, chief economist at Azimut Brasil Wealth Management. “It is contortionism to be able to continue cutting [the Selic].”

Paulo Val, chief economist at Occam Brasil, raised a similar point. In his view, the extension of the inflation-convergence horizon comes at a time when the monetary authority should be more “cautious.” “The Central Bank should shorten the convergence horizon, not extend it. By signaling that it may be looking further ahead [than it should], it may contribute to a deterioration of longer-term horizons,” he said.

Luciano Sobral, chief economist at Neo Investimentos, said the Central Bank is moving away from a model to which it had tied itself in the past and that is now creating problems for the authority. “I just don’t know how it will get out of this trap,” he said, adding that this departure from the model is likely to create noise among financial-market participants. “The market demands a lot of consistency and adherence to the model, and this deviation by the Central Bank will bring it a lot of criticism,” he said.

Laiz Carvalho, Brazil economist at BNP Paribas, sees it differently. She said expanding the relevant horizon was more of an “attempt to signal what may happen in 45 days, assuming the alternative scenarios.” “I don’t think the fact that it talked about the first quarter of 2028 now means it can talk about that all the time. I think it did this to show that the door is more closed to a 25-basis-point cut than before,” she said.

Door left open

The statement did not give firm guidance on future decisions, leaving the door open to further cuts amid unanchored expectations and the inclusion of fiscal stimulus to consumption in the balance of risks for higher inflation.

Copom therefore stressed that its next steps will depend on “new information.” It also said uncertainty around the projections remains higher than usual. For the relevant horizon of the fourth quarter of 2027, the Central Bank’s IPCA inflation forecast rose to 3.7% from 3.5% in the previous statement.

On the projection, Carvalho said it would be important for the Central Bank to explain in next week’s minutes how it arrived at 3.7%. “Taking into account the relevant horizon of the fourth quarter of 2027, our inflation forecast is 3.6%. This shows that the Focus survey projection for the Selic, at 13.75% this year and 12% in 2027, is not enough to bring inflation to the target,” she said. “I need an alternative scenario above Focus to get close to convergence to the target,” she said.

Sobral said Copom is showing that the scenario has worsened, but that there is still room to cut rates. “What the Central Bank is indirectly communicating is that the interest rate is very high and that it is very far from the neutral rate, so it can accommodate a clearly worse scenario,” he said. “But the postwar world has become more complicated. Even if oil falls back below $80 a barrel, inflation expectations are unlikely to improve,” he said.

Olivares also sees the scenario with greater concern, especially because of a more conservative Federal Reserve. “In this globalized world, how can you be out of step with the [interest-rate] cycle of the largest economy without seeing your currency lose value?” he said, referring to the fact that a smaller interest-rate differential tends to pressure the exchange rate, while a weaker real would add another source of inflationary pressure. “There was a very clear surprise in the United States at this meeting, with the Fed proving more cautious than expected.

“If it is more conservative, we have to recognize our insignificance as a small economy,” he said. “The Central Bank can argue that the level of interest rates is very restrictive. But then why is inflation still above the target and activity still strong? Something does not add up.”

Case for a pause

Val said the current scenario would be consistent with the end of the easing cycle. “We are seeing the economy grow and real income gains. Inflation is also deteriorating in a real way. These levels are incompatible with meeting the target.”

According to Val, Copom’s tone was confusing, and the decision was not strong enough to contain the deterioration in expectations. “A stronger signal would have been that the most likely scenario is for interest rates to remain stable at this level. But the Central Bank did not want to provide direction.”

*By Arthur Cagliari, Bruna Furlani and Hamilton Ferrari — São Paulo and Brasília

Source: Valor International

https://valorinternational.globo.com/

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Companies invest with eye on future and competitiveness

Long-term view and competitive gains shape strategy of leaders honored at the 26th “Executivo de Valor” awards

 

 

Maintaining a focus on long-term projects and improving competitiveness has become the main strategy adopted by the leaders chosen for the 26th edition of the “Executivo de Valor” awards as they seek to keep delivering strong results in a more turbulent and uncertain global environment, marked by wars, protectionism, and a retreat from globalization. In Brazil, the picture is even more challenging because of high interest rates and the October elections.

Opening the event, held at the Rosewood hotel in São Paulo, Frederic Kachar, director-general of publishing company Editora Globo and Sistema Globo de Rádio, said no leader reaches goals alone, without a team aligned with the business. He also highlighted common traits among the winners, such as their ability to adapt to shifts in the business environment, build autonomous and integrated teams, and attract and retain talent.

Kachar also emphasized the importance of shared leadership, with strong teams around the CEO and family members who are a key part of the support network behind successful professional trajectories.

Valor’s editor-in-chief, Maria Fernanda Delmas, highlighted the meticulous work carried out by the jury in selecting the executives who stood out in “a very difficult scenario.” She also stressed the importance of valuing people within companies, citing recommendations from specialists. “The best leader is not the one who has an answer for everything, but the one who creates an environment where the team can flourish. And more important than hiring individually brilliant professionals is being able to build a team that is adapted to the company’s culture.”

Capital costs

The unusual nature of the current geopolitical environment, with simultaneous wars affecting commodity prices and bringing inflation into Brazil, was highlighted by Itaú Unibanco CEO Milton Maluhy Filho. He noted that this dynamic has prompted a reorganization of investor flows, which ended up benefiting emerging markets, including Brazil. “But this is a flow that can leave quickly, just as it came in. What matters more is attracting long-term investment that helps Brazil achieve vigorous growth,” said the bank’s chief executive..

In Maluhy’s view, reducing the cost of capital is essential. “This involves three pillars: interest rates, the institutional environment, and legal certainty. If there are conditions to improve these three points, reforms and transformations in productivity and global competitiveness will also gain strength.”

A forward-looking approach is an important guide. Daniela Manique, Solvay’s CEO for Latin America, said that, at the specialty chemicals company, investment decisions are based on one question: “Does this project make us more competitive, more sustainable, and less carbon-intensive? If the answer is yes, we move forward,” she said. Manique said the focus on heavy investment in the energy transition remains unchanged.

WEG CEO Alberto Kuba is following a similar path. He said the Brazilian maker of electric motors, automation systems, transformers, and generators has centered its strategy on three megatrends that do not change in the short term: sustainability, energy efficiency, and artificial intelligence. “Given all the uncertainties, our focus is on reducing vulnerabilities and risks,” he said.

Of WEG’s 68 plants, 48 are abroad, and the company has been seeking to manufacture products closer to customers to reduce problems related to logistics, supplies, and currency fluctuations. In such an unpredictable scenario, Kuba said, the most sensible way to make decisions is to assess whether the investment is aligned with the company’s long-term goals and to analyze risks and their probabilities, as well as opportunities.

Risk management

Also looking to a broader horizon, Vale CEO Gustavo Pimenta said instability in the current environment should lead to a world more focused on food, energy, and mineral security. Although conflicts between countries affect the flow of goods and generate inflation, Pimenta said this does not change the mining company’s plans: “Our business is medium- and long-term. If we believe iron ore and copper, for example, have positive prospects, we keep investing.”

Miguel Setas, CEO of infrastructure concessions company Motiva, stressed the importance of analyzing the risks inherent to each business and economic environment. The company has been drawing up scenarios on the impact of the war in Iran on oil prices. “We prepared for this crisis by entering 2026 with more than 80% of investments contracted; therefore, execution is mostly guaranteed. Our response to this geopolitical shock is risk management and the adoption of measures that mitigate these risks, in particular being able to bring forward as much as possible the contracting of our investments.” For 2027, more than half of investments have already been contracted.

Caution is a valuable asset in volatile scenarios. Pedro Lima, CEO of coffee company Grupo 3corações, expressed concern about fiscal leverage at the moment. “We are conservative, our debt limit is very carefully managed, very well administered,” he said. The company keeps tight control over expenses, and investments are carefully planned to navigate unexpected developments. “We can have surprises at any moment, because Brazil is like that, so we have to remain cautious at this moment and take care, be resilient and, above all, stay focused on the business.”

Deborah Vieitas, chair of Santander’s board of directors, cited among the key criteria “clarity about risks, which is very important, alignment with the organization’s values and strategy, the long-term impact, and the ability to adapt if the scenario changes.” But she issued a warning against becoming paralyzed by uncertainty. “The speed and quality of the decision — or of the response — make more difference than the search for a perfect solution.”

For the insurance industry, there is a particular feature. “Interestingly, an environment of growing volatility ends up aligning with what we offer. In a more unpredictable world, demand increases for protection, planning, and predictability,” said Paulo Kakinoff, CEO of insurance and financial-services group Porto. Kakinoff said the group continues to expand investments in products, services, technology, and distribution structure, and that the focus is on strengthening the business’s structural capabilities.

Investments remain on track

“The investment bet on the country continues,” said telecom carrier Vivo CEO Christian Gebara, noting that the company invested R$9.2 billion last year. Gebara’s decisions follow the rules of a publicly traded company. “We have a commitment to the market regarding shareholder remuneration, and that is a basis for decision-making, keeping net income growing. All the decisions we make have a very clear focus on generating revenue from EBITDA, cash generation, ending in free cash flow and profit.”

Beto Carrero World is also maintaining its investment plan, with R$2 billion planned for the coming years. The theme park imports all of its equipment and materials. The concern, more than with the exchange rate, is the tax burden and the Import Tax. “This could affect us, but not to the point that we would stop making the investments,” said Alexandre Murad, CEO and chair of the board.

In Brazil, another source of uncertainty is this year’s electoral process. For Santander’s Vieitas, focusing on the long term becomes even more important at this point, and companies must be able to compete in any context.

That is what Embraer has been seeking to do. “It is a global company. We do not expect any impact on our business because of Brazil’s election. On the contrary, our vision is long-term. We have a very well-defined strategic plan, and our focus is to follow that strategy and maintain sustained growth in the coming years,” said CEO Francisco Gomes Neto.

The same recipe has been applied at car-rental and mobility company Localiza. “Elections are part of the country’s democratic environment, and it is natural that, during this period, the market pays closer attention to economic and regulatory issues and to investment behavior. Even so, we understand that companies with a long-term vision can move through different cycles while maintaining consistency in execution, financial discipline, and strategic focus,” said Bruno Lasansky, CEO of Localiza&Co.

“The company continues in the direction that has been defined,” echoed Diego Barreto, CEO of food-delivery platform iFood. However, Barreto noted that legal uncertainty and the lack of economic stability plans to think about the country’s future are the factors that most affect the business. For him, the elections in the second half do not make the scenario more unstable than usual. “The way the discussion takes place has always been part of Brazil, it is not a problem or a difficulty,” he said.

The “Executivo de Valor” awards have ArcelorMittal and Welhub as master sponsors; Alelo and Falconi as sponsors; Audi as the official car; 3 Corações as the official coffee; and Rosewood, Eletromidia, and Febraban as supporters.

By Valor — São Paulo

https://valorinternational.globo.com/

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Meat industry seeks broader ban on antimicrobials

Request comes after European Union removed Brazil from list of countries authorized to export animal products to the bloc

Brazil’s meat industry has asked the Agriculture Ministry to expand restrictions on the use of antimicrobials in the country, according to letters sent to the ministry on Thursday (11) and reviewed by Valor. The request comes in response to the European Union’s decision to remove Brazil from the list of countries authorized to export animal products to the bloc starting in September. The move is intended to signal to European authorities a stricter stance on the use of such products in animal production chains.

The Brazilian Animal Protein Association (ABPA) requested that the ministry ban the use of enramycin, avilamycin and flavomycin in the poultry sector. The measure would expand a rule introduced in May covering phosphonic acid derivatives, including fosfomycin.

In the beef sector, the Brazilian Beef Exporters Association (Abiec) asked the government to extend restrictions to the molecules sodium monensin, salinomycin, lasalocid and narasin.

In April, the ministry published a regulation prohibiting the import, manufacture, commercialization and use of performance-enhancing additives containing avoparcin, bacitracin, zinc bacitracin, bacitracin methylene disalicylate and virginiamycin. The Agriculture Ministry did not respond to requests for comment.

The industry groups stressed to the ministry that the request comes amid ongoing discussions with the European Union regarding requirements related to antimicrobial use in animal production, which are set to take effect on September 3.

In the letters, ABPA and Abiec said that although the European decision is linked to proof of official inspection and control mechanisms ensuring the non-use of such drugs in animal production, expanding the prohibitions could “strengthen Brazil’s regulatory position, support efforts led by the federal government with European authorities and demonstrate the country’s commitment to the principles of prudent antimicrobial use and one health.”

In a statement to Valor, ABPA and Abiec confirmed that the letters had been sent. “The initiative aims to support Brazil’s regulatory harmonization efforts with international standards and strengthen the country’s position in ongoing discussions with trade partners, especially the European Union,” the associations said.

*By Rafael Walendorff, Globo Rural — Brasília

Source: Valor International

https://valorinternational.globo.com/

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APM Terminals opens Latin America’s first fully electrified container terminal

With more than R$2bn in investments, the facility expands the capacity of Pernambuco’s port complex by 55% and is expected to handle up to 400,000 TEUs annually in its initial phase

 

 

 

APM’s 100% electric container terminal in Pernambuco
APM’s 100% electric container terminal in Pernambuco — Photo: Divulgação

APM Terminals, the port terminal division of Denmark-based A.P. Moller-Maersk, officially inaugurated its new container terminal at the Suape Industrial Port Complex in Ipojuca, Pernambuco, on Friday. Built with investments exceeding R$2 billion, the facility is the first fully electrified container terminal in Latin America and was designed to increase the container-handling capacity of the Pernambuco port complex by 55%.

In its initial phase, the terminal is expected to handle up to 400,000 TEUs (twenty-foot equivalent units) annually, with the potential to connect Pernambuco to markets across Latin America, North America, Europe, and Asia.

“More than a new port asset, this terminal expands the Northeast’s capacity, integrates Brazil into the world’s main trade routes, and raises the region’s operational standards with a fully electrified infrastructure,” said Daniel Rose, managing director of APM Terminals Suape and Pecém.

The inauguration ceremony was attended by Vice President Geraldo Alckmin, Pernambuco Governor Raquel Lyra, Deputy Governor Priscila Krause, Ports and Airports Minister Tomé Franca, Danish Ambassador to Brazil Eva Bisgaard Pedersen, Ipojuca Mayor Carlos Santana, and Suape Port CEO Armando Monteiro Bisneto, among other government officials and business representatives.

A study conducted by consulting firm A&M Infra and law firm Navarro Prado Advogados in partnership with APM Terminals projects that the new terminal could generate up to R$4.8 billion in additional exports, approximately R$4.9 billion in gross domestic product, and more than 43,000 potential jobs across supply chains linked to foreign trade.

Officials at the event highlighted the terminal’s importance for expanding both state and national port capacity and, in particular, strengthening Suape’s strategic role by diversifying Brazil’s logistics options beyond ports in the South and Southeast regions.

“Modernizing Suape means modernizing Brazil. The delivery of this new terminal represents a major leap forward for the infrastructure of Pernambuco, the Northeast, and Brazil’s competitiveness. It means lower costs, greater integration with global markets, more opportunities for agribusiness and industry, and stronger job creation,” Vice President Geraldo Alckmin said, describing the project as an example of successful cooperation between the public and private sectors.

Governor Raquel Lyra said the terminal reinforces Pernambuco’s position in international trade.

“With this new development, Pernambuco strengthens the Northeast’s logistics competitiveness, creating conditions to attract new businesses, generate jobs, and support the economic development of our state while connecting us even more closely to the world,” she said.

Ports and Airports Minister Tomé Franca highlighted the continued flow of foreign capital into Brazil’s port sector.

“Despite global instability, the port sector has literally become a gateway for investment into the country, demonstrating international confidence in Brazil’s role. This new APM Terminals container terminal is an example of that confidence,” he said.

Remote operations

The terminal’s key technological differentiator is the full electrification of its equipment, which accounted for nearly R$235 million of the total investment, along with the remote operation of major assets, including ship-to-shore (STS) cranes and rubber-tired gantry (RTG) cranes. According to the company, the setup represents a benchmark for innovation in Latin America.

The facility covers approximately 495,000 square meters and features a 430-meter quay with a depth of up to 15.5 meters, enabling it to accommodate large vessels operating on major international routes. It has a static storage capacity of around 12,000 TEUs and more than 300 power outlets for refrigerated containers.

According to the company, construction of the terminal generated more than 2,000 direct and indirect jobs.

Suape Port CEO Armando Monteiro Bisneto said the start of operations “reinforces the strategic position of our industrial port complex on both the national and international stage” and “sends a clear message to the world that Pernambuco is ready to receive major investments and lead a new cycle of sustainable growth, innovation, and competitiveness.”

Suape is APM Terminals’s second operation in Brazil’s Northeast. The company has operated at the Port of Pecém, Ceará, for more than two decades and continues to expand its presence there.

According to APM Terminals, the main obstacle to logistics development in the Northeast is not demand but the expansion of infrastructure and installed capacity, which is essential to unlock new trade flows and attract long-term investment.

Globally, APM Terminals operates terminals in more than 60 locations across 35 countries and employs more than 20,000 people. In 2025, the company recorded 27,000 vessel calls and handled 25.8 million container moves across its terminal network.

*By Naiara Bertão, Prática ESG — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Central Bank rules begin overhaul of Brazil’s crypto market

Higher regulatory costs may reduce license applications and accelerate consolidation among virtual asset service providers

 

 

 

The Central Bank’s new regulation for virtual asset service providers has already started reshaping Brazil’s crypto market as the deadline approaches for companies to apply for authorization.

Companies in the sector are reviewing their structures, recalculating costs, and assessing whether they will have enough capacity to operate with their own license or whether they will need to team up with larger players to continue offering services in the country.

The deadline to apply for a license ends in late October. Until then, companies involved in intermediation, custody, infrastructure, tokenization, or other services linked to virtual assets will have to decide which business model they will follow under the country’s new regulatory framework.

Industry executives say the regulation provides legal certainty and tends to raise governance standards, but it also imposes a more expensive and complex transition than part of the market had expected. The main concern is the increase in regulatory costs.

For virtual asset service providers, known as VASPs, the new minimum capital requirements range from about R$10 million to R$37 million, depending on the activity. Before the Central Bank published the final rules, industry sources estimated that between 150 and 200 companies could seek authorization.

The current forecast is that not much more than 50 companies will file applications. Some companies are expected to seek partnerships, operate through licensed structures, assess mergers and acquisitions, or reduce the scope of their activities in the country.

Costs drive consolidation

For Julia Rosin, CEO of the Brazilian Association of Crypto Economy (ABcripto) and policy manager for Latin America at Coinbase, the sector already expected regulation to arrive, but some of the requirements ended up far from the expectations formed during the public consultations.

“Everybody knew the rules were coming, since we had public consultations. What happened were two things: some items came out very different from what emerged from the consultations, and problems were identified when companies started implementing the rules internally,” she said.

Rosin said the increase in regulatory costs has led companies to seek alternatives to make market entry cheaper, whether through the hiring of third parties, internationalization, mergers, or the sale of operations.

“You end up creating layers of complexity in the provision of a service because of the demand created by regulatory costs,” she said.

According to people familiar with the matter, the trend is toward concentration. Smaller companies are considering seeking investors, selling portfolios, signing agreements with larger companies, or operating through licensed structures.

At the same time, companies with more capital have begun strengthening areas such as compliance, risk, internal controls, regulatory legal teams, technology, cybersecurity, and auditing. Industry sources also report a shortage of professionals who combine experience in the regulated financial market with technical knowledge of blockchain and virtual assets.

Technology infrastructure has also become another focus beyond staffing. Companies report doubts about certifications, audits, security tests, contingency plans, and system validation.

Support structures

According to João Dunin, chief operating officer of Z.ro Bank, domestic and international exchanges have been looking for providers capable of offering infrastructure for Pix, Brazil’s instant payment system,, individualized accounts, segregation of funds, compliance, know your customer (KYC), procedures, and reporting to the Central Bank. “You regularize the crypto side, but there are also many little legs in the traditional fiat world,” he said.

Dunin said some companies are trying to avoid having to build a full local operation only to handle payments and regulatory obligations. “You will focus on your business. Your business is crypto. Pix transfers, reporting to the Central Bank, that stays in-house,” he said.

Dunin said he has noticed an increase in demand for this type of structure since the regulation was published. According to him, companies began reviewing their models before the final deadline to request authorization.

“We have a deadline. That deadline is October 29,” he said. “The Central Bank is defining the form of the audit, how it will work, evidence and so on. But to audit an exchange operation, it will take two months, maybe three, depending on the level of the audit.”

Among the points that still raise questions among companies in the sector are how information should be reported to the regulator, transition rules for certain services, requirements linked to certifiers, and integration with already regulated structures such as Pix.

For ABcripto, delays in resolving these issues could also affect the regulator itself.

“The longer they take to give these answers, the later people will apply. So they will have an overload of applications,” Rosin said.

Central Bank rules out step-by-step manual

On the Central Bank side, Gustavo Martins dos Santos, a representative of the Financial System Regulation Department said in an interview with Valor in early April that there will not be a detailed manual to guide companies through each step.

“There will be no manual. The rule sets out what is required in an open way, and we will deal with it case by case,” Martins dos Santos said.

He also said the required certification and controls help give the regulator greater confidence that companies seeking to operate in the market have minimum requirements in place.

“The problem when someone enters the market is this: they enter, but removing them is difficult. The administrative cost for society of removing someone from the market is very high,” Martins dos Santos said.

Even among sources critical of the transition design, there is consensus that regulation is necessary. The Central Bank’s entry is expected to raise standards for anti-money-laundering prevention, governance, information security, and accountability.

The risk raised by industry participants is that the pursuit of greater security may reduce the diversity of business models and accelerate market concentration.

*By Lara Asano  — São Paulo

Source: Valoar International

https://valorinternational.globo.com/

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Nissan eyes electrified production in Brazil as tariffs reshape sector

Automaker plans new models, explores partnership with China’s Dongfeng while calling for stronger protection of local manufacturing

 

 

 

For Christian Meunier, CEO of Nissan Americas, raising import tariffs to protect local industry—as seen in the United States—is an irreversible trend worldwide. As a result, while the automaker prepares to launch five imported cars in Brazil over the next 18 months to accelerate its electrified-vehicle offering, it expects to decide within three to four months which model will be its first electrified vehicle produced in Brazil. The plans also include discussions with Dongfeng Motor Corporation, Nissan’s partner in China, regarding a potential agreement to share production capacity at Nissan’s plant in Resende, Rio de Janeiro state.

Considering projects with Dongfeng in Brazil does not mean Meunier supports the easy entry of Chinese automakers into the Brazilian market. On the contrary, he strongly criticizes vehicles produced in China that, according to him, enter the country at low prices “thanks to dumping practices.” “Many subsidies are not reflected in vehicle prices,” he said. The executive argues that the Brazilian government should protect the domestic automotive industry to avoid what he described as a potential “collapse” of the sector.

“The local industry needs greater support than imports because Brazil is not a low-cost country,” Meunier told Valor. In his view, raising import tariffs on hybrid and electric vehicles to 35% beginning in July will not be enough.

He noted that Mexico is preparing to raise tariffs to 50% and pointed to similar protectionist measures in Europe and Canada. In the United States, tariffs on Chinese-made vehicles are 100%. According to Meunier, however, the main barrier is not the tariff itself but rather a “national security policy” focused on the use of locally produced batteries and software.

Despite advocating stronger protection for local manufacturing, Meunier acknowledges that Chinese automakers “move quickly.” That reality requires competitors to make faster decisions, often before a detailed local production plan is in place. “There is work underway to bring a third product, an electrified model, to be assembled in Resende,” he said.

“My goal is to find a new baby for Resende,” Meunier joked, referring to Nissan’s manufacturing complex in Rio de Janeiro state, which currently produces two SUVs: the new Kicks and the Kait, launched in July and December 2025, respectively. The decision regarding the third model will be made within three or four months, he said.

However, there is no timetable yet for implementing a potential cooperation agreement with Dongfeng in Brazil. If completed, Nissan would become the fifth automaker in the country to open factory capacity to Chinese manufacturers. Renault, Stellantis, HPE Automotores, and Jaguar Land Rover have already made space available at their Brazilian facilities for production of Chinese brands or joint projects involving Geely, Leapmotor, GAC, and Omoda & Jaecoo, respectively.

“Dongfeng is our partner in China, so this is an opportunity we are exploring. Among several possibilities under consideration is working with them on a solution like this. But nothing has been decided. We will do things together, but we are not disclosing details because some points still need to be finalized,” Meunier said. Nissan is also negotiating cooperation agreements with Chinese partners in the United Kingdom.

Meanwhile, the company is preparing the arrival of imported models in Brazil. The large SUV X-Trail will be the first of the five launches announced by Meunier through the end of 2027. The vehicle, Nissan’s first hybrid model to be sold in Brazil, will also introduce to the Brazilian market a hybrid technology already used by the company globally.

Known as e-Power, the system allows a hybrid vehicle to be driven entirely by electric propulsion at all times without the need for external charging. An internal combustion engine serves only to generate electricity for the battery that powers the electric motor.

The new product launches represent an important step for Nissan, which currently holds just over 3% of Brazil’s vehicle market, as it seeks to increase market share. Production planning would follow. “We need to understand how we can bring in a new product that can also be localized and assembled in Brazil. We cannot rely solely on imports. That does not work in the long run.”

Since taking over as head of Nissan Americas in January 2025, the French executive has overseen an increase in vehicle production in the U.S. following the announcement of higher import tariffs by President Donald Trump. Within 18 months, the share of locally produced vehicles in Nissan’s U.S. sales rose from 44% to nearly 65%. According to Meunier, the target is to reach 80% by the end of the decade. The expansion of local production required a reorganization of manufacturing operations in Mexico and Japan, which began supplying vehicles to Canada.

Exports from the United States to Canada, which had been disrupted after tariffs were raised to 25%, have recently started to recover. “Volumes are still small because margins remain under pressure. But we need the product. We do not want to lose customers in Canada who need the large vehicles produced in the United States,” he said.

Living with higher tariffs does not mean conflict with the U.S. government, according to Meunier. “We do not need to fight the government. We are a large company. We have to work with what we have and with what the government is telling us to do. In Brazil, we have to do the same.”

According to the executive, the business community has already realized that tariffs are here to stay, regardless of changes in government. “When you have tariffs of 25% or even 15%, it becomes very difficult to remove them when governments need the revenue. The Democrats did not eliminate the tariffs introduced during Trump’s first administration,” he noted.

Asked how industrial protection policies might evolve after Brazil’s next presidential election and amid relations with China, Meunier said: “I think what matters for the Brazilian people is preserving jobs and maintaining a strong industrial base, regardless of whether the right or the left wins.” In his view, domestic vehicle production will remain “a key success factor in the United States, Mexico, and Latin America” over the next decade.

Nissan’s Brazilian operation, which is now preparing to expand its lineup with new models, emerged unscathed from the company’s recent global restructuring, which included layoffs and factory closures, including in Mexico and Argentina. The restructuring plan was primarily focused on reducing costs.

*By Marli Olmos — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil may cut tariffs on U.S. machinery in talks

Move would be part of negotiations to avert possible 25% surcharge on Brazilian goods

Brazil’s federal government may reduce import taxes on machinery and information technology goods imported from the United States as part of negotiations over a possible new 25% tariff on Brazilian products.

“A small number [of items] was offered as a starting point for negotiations,” a Brazilian government source said Monday (8). Talks are expected to move forward this week.

The list may include some items whose import tax rates were raised in February by decision of the Executive Management Committee (Gecex) of the Foreign Trade Chamber (Camex). These are machinery and information technology goods that have similar products made in Brazil.

As Valor reported, the increase in import tariffs would generate R$14 billion in additional revenue this year.

The list being negotiated with the U.S. government also includes products that have no similar goods made in Brazil and are manufactured by the United States, said a person familiar with the talks.

The list was presented during a meeting between technical teams from the two countries, when Brazil laid out some possibilities within the tariff agenda on which it is willing to move forward. The proposals are now being assessed by the U.S. government. Any negotiation involving Pix, Brazil’s instant payments system, for example, is ruled out by the Brazilian side.

The talks are being held within the bilateral working group created after the May 7 meeting between Presidents Luiz Inácio Lula da Silva and Donald Trump.

Negotiations expected to continue

The 30-day deadline initially set for the group’s work ended Sunday (7). However, the expectation is that negotiations will continue in the coming weeks, at least until July 15, the scheduled date for the conclusion of the administrative process conducted by the U.S. that could result in a 25% surcharge on part of Brazilian exports. During this period, Brazil will try to build a negotiated solution capable of preventing the measure.

Last week, the Office of the United States Trade Representative (USTR) released its preliminary conclusion on investigations conducted under Section 301 of the Trade Act, which allows tariffs on products in response to practices deemed harmful to the competitiveness of U.S. products.

Launched in July last year, the investigation covers issues ranging from Pix to illegal deforestation, the fight against corruption, and commerce on 25 de Março Street, a major shopping area in São Paulo.

For now, the 25% tariff resulting from the investigation is a recommendation. The Brazilian government believes at least one or two more meetings of the bilateral working group will be needed to determine whether there is room for an agreement that could avoid the tariff increase.

Affected sectors

Alongside negotiations with Washington D.C., the Ministry of Development, Industry, Trade and Services (MDIC) is expected to resume sectoral working groups with the private sector, following the same model used during the first tariff round.

The government believes it will be necessary to mobilize the sectors potentially affected to discuss trade-protection strategies and monitor the impact of the U.S. measures.

As Valor reported, MDIC has already started talks with some segments and plans to broaden the dialogue in the coming days. Meetings are planned with representatives of the footwear industry, as well as new talks with entities such as the American Chamber of Commerce for Brazil (Amcham Brasil) and the National Confederation of Industry (CNI).

In addition, some Brazilian products may also be subject to an additional 12.5% tariff applied by the U.S. to about 60 countries on the grounds of failures to combat the entry of goods produced with forced labor.

In that case, the total tariff burden could reach 37.5%. Behind the scenes, however, members of the Brazilian government see less room to negotiate the additional 12.5% tariff because it is a broader measure and is not aimed at a specific country.

*By Giordanna Neves and Lu Aiko Otta — Brasília

Source: Valor International

https://valorinternational.globo.com/

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New U.S. tariff may hit up to 45% of Brazil exports

Government sees smaller impact, but companies face narrow path to challenge 25% duty proposed under Section 301

A new 25% tariff put up for public comment by the U.S. on Monday (1) could affect as much as about 45% of Brazil’s exports to the U.S., depending on how the calculation is made. Among estimates collected by Valor, the government has the most modest impact estimate, at 21%, although it expects “major losses” for the affected sectors.

Government spokespeople said they do not believe the proposal will effectively become tariffs, but experts noted that, unlike the duties imposed in 2025 by U.S. President Donald Trump, those that could result from the current measure are considered difficult to challenge. In addition, other ongoing investigations could lead to new tariffs.

The new tariff proposed by the Office of the U.S. Trade Representative (USTR) is based on Section 301, a 1974 law. The report, which concluded the investigation opened against Brazil in July 2025, argues that certain Brazilian policies and practices related to digital trade, such as Pix, intellectual property, anti-corruption efforts, and market access, among others, negatively affect the U.S.

The punitive tariff proposal was put up for public comment, meaning the 25% tariff does not take effect immediately and opens a period for interested parties to submit comments. A public hearing is scheduled for July 6 in Washington, D.C.

Brazilian products are already subject to a 10% duty, imposed globally by Trump after the country’s Supreme Court invalidated the sweeping tariff package. That measure is valid until the end of July.

Welber Barral, a partner at BMJ and at law firm Barral Parente Pinheiro, said the strategy now for affected companies and sectors is to file petitions and demonstrate the tariff’s impact on U.S. production and prices.

He said companies will have a better chance if they can mount their defense together with U.S. importers, who can describe the effect of the new tariff on their costs and the importance of Brazilian supply.

Legal challenges

Vera Kanas, a lawyer specialized in international trade and a partner at VK Law, noted that, in addition to the process that led to the 25% tariff, Brazil is, alongside 59 other countries, the target of another Section 301 investigation into imports from countries that allegedly fail to combat forced labor.

Kanas said the tariffs now proposed under Section 301 are harder to overturn than the 40%-50% sweeping tariff the U.S. imposed on Brazilian imports last year under the IEEPA, the law used in cases of international economic emergencies. Section 301, she said, is more consolidated legislation. “This time, unlike with the IEEPA, there should not be U.S. companies importing Brazilian products on the assumption that they will later be able to request a refund,” Kanas noted.

The USTR report says the new tariff should not apply to aircraft and parts, orange juice, some foods such as coffee and meat, pulp, certain minerals, fertilizers, and critical and strategic minerals.

Valor found 986 items on the exemption list, based on six-digit Harmonized System codes. Of those, Brazil exported 666 products to the U.S. in 2024, before the effects of the current Trump administration’s policies.

In terms of quantity, there are more items than the 433 that were exempted from last year’s so-called 40% to 50% tariff and that were effectively shipped in 2024. In terms of exempted values, however, the list now proposed is smaller because certain types of crude cast iron were not included in the exemptions.

According to Valor’s calculations, based on 2024 exports, before the impact of the current Trump administration’s tariff policy, the new measure could affect 45.8% of shipments to the U.S., worth $18.5 billion.

The Section 301 report does not affect products subject to sectoral tariffs applied on national security grounds under Section 232, another U.S. trade law, from 1962. That process is therefore running in parallel with the Section 301 investigations and includes items such as steel, aluminum, and derivatives.

Impact estimates

The American Chamber of Commerce says the new tariff could affect about $15 billion in exports to the U.S., or 35.5% of Brazilian shipments, in a calculation that used the U.S. 2024 database. The segments potentially most affected are basic industry, machinery and equipment, agribusiness, forest products, and processed foods. Pig iron could be the product most affected, with $1.54 billion in exports subject to the tariff.

Sergio Vale, chief economist at MB Associados, said the proposal should mainly affect the manufacturing industry, in line with Trump’s campaign to reindustrialize the country. Vale estimates that about 27% of what Brazil exported to the U.S. in 2025, or $10.1 billion, would be exposed to the new tariff.

He said the measure will result in an even greater decline in the U.S. share of Brazilian exports and an increasingly closer relationship between Brazil and China. In 2024, the U.S. absorbed 12% of Brazilian exports, a share that fell to 10.8% last year. Over the same period, China’s share rose to 28.7% from 28%.

Vale said it seems almost inevitable that the new tariff will materialize, even with the USTR process still open. “The U.S. government offered a menu of very subjective justifications, such as deforestation or intellectual property, or intangible ones, such as Pix. The instant-payment system is embedded in the Brazilian economy, made credit cheaper, brought a large number of people into the banking system, and there is no going back.”

More optimistically, Márcio Elias Rosa, minister of Development, Industry, Trade and Services, said the new measure could cover 21% of total sales to the U.S. The minister said 54% of exports to the U.S. are free from the sweeping tariff and 25% are under Section 232. He cited machinery and equipment among the sectors most affected, with “major losses” for employment, income, and industry. When citing the most affected segments, Rosa said the impact would occur if the proposal becomes tariffs, “which we believe will not happen.”

According to José Ronaldo Souza Junior, CEO of Quantivis Analytics, the Section 301 measure could affect as much as 43.7% of Brazilian exports to the U.S., considering 2025 data. In value terms, exports of those products to the U.S. totaled $16.5 billion last year. He said the calculations are not precise because it is necessary to reconcile data from the USTR list, which uses an eight-digit classification, with the Brazilian government’s more limited six-digit Mercosur standard.

*By Álvaro Fagundes, Grace Vasconcelos, Hamilton Ferrari, Marcelo Osakabe, Mariana Andrade and Marta Watanabe — São Paulo and Brasília

Source: Valor International

https://valorinternational.globo.com/

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