04/25/2025


WEG, which makes electric motors and transformers at its plant in Jaraguá do Sul, Santa Catarina, gets 8% of revenue from exports to the U.S. — Foto: Rogerio Vieira/Valor
WEG, which makes electric motors and transformers at its plant in Jaraguá do Sul, Santa Catarina, gets 8% of revenue from exports to the U.S. — Photo: Rogerio Vieira/Valor

More than the proposed 10% additional tariffs on Brazilian imports to the U.S., investment analysts are increasingly concerned about the broader shift in global trade dynamics that could result from an escalating U.S.–China trade war.

There is consensus among analysts at banks and brokerages that Brazilian companies with more globalized operations are better positioned to cushion the impact of any new trade barriers. However, continued uncertainty surrounding U.S. policy—driven by erratic decisions and reversals—makes it difficult to clearly separate potential winners from losers.

Embraer remains somewhat shielded thanks to its “near-monopoly” in the U.S. regional jet market, analysts say.

The case of Iochpe-Maxion, a Brazilian auto parts manufacturer, illustrates the challenges in assessing risks. Earlier this month, J.P. Morgan had identified the company as one of the sector’s most exposed to the proposed tariffs. But that assessment came before news reports suggested that U.S. President Donald Trump was considering exemptions for vehicle and parts imports to allow companies more time to establish local manufacturing operations.

Should such exemptions materialize, there is room for a positive impact if Iochpe avoids direct tariffs, according to UBS BB. The same would apply to Tupy, another listed Brazilian auto parts supplier.

Brazilian firms would be indirectly affected by tariffs imposed on light vehicles exported to the U.S. that contain parts manufactured in Mexico, where both companies operate. Mexico is facing additional tariffs of 25%. In a worst-case scenario, with no exemptions, J.P. Morgan estimates up to a 6% revenue hit for both firms. The bank also reiterated that the potential drop in demand triggered by tariffs poses another layer of risk.

XP analysts echoed that concern, emphasizing how higher prices could dampen volumes or squeeze supply chains by distributing added costs downstream.

The Financial Times recently reported that Trump may exempt Chinese auto parts from tariffs following pressure from industry executives, while maintaining existing tariffs on imports from other countries.

In the pulp and paper sector, XP does not foresee significant changes in volume, given the limited U.S. production of short-fiber pulp, which depends heavily on Brazilian exports. However, analysts at U.S. bank Truist, citing Dow Jones Newswires, warned that the new tariffs could suppress demand from American buyers. While the industry is known for its resilience during downturns, the sweeping tariff hikes could become the tipping point that deepens a broader economic slowdown, weakening demand for paper and packaging.

In Brazil, the impact on Suzano is expected to be minimal, given the company’s relatively low exposure to the U.S. market, XP noted. However, the recent drop in pulp prices in China is likely to weigh on results for exporters, according to Bank of America.

Embraer, with global operations that include factories in Portugal and the U.S., maintains a strong market position in regional jets but is not immune to macroeconomic threats, Citi analysts warn. A recession would likely curb demand for both commercial and executive aircraft, and the company still faces risks tied to higher and more aggressive tariffs.

WEG, often viewed by analysts as one of the companies least exposed to trade disruptions, remains on XP’s watchlist due to the cyclical nature of its commodity-linked product portfolio. About 8% of its revenue comes from exports to the U.S.

“As long as the domestic U.S. outlook remains uncertain, we see room for WEG to expand local production by ramping up capacity at its Marathon facilities, reducing reliance on other regions if needed,” the brokerage noted. WEG acquired Marathon in 2023; the U.S.-based company has operations across several countries.

In the steel sector, Gerdau is seen as a likely beneficiary thanks to its substantial U.S. footprint, although it remains vulnerable to a potential recession. XP estimates that around 50% of Gerdau’s EBITDA comes from its North American operations. “If tariffs are indeed raised to those levels, it’s good news for local producers, including Gerdau’s U.S. unit,” Itaú BBA commented. According to the bank, every 5% increase in Gerdau’s average selling price in the U.S. adds 12% to its EBITDA. The bank also pointed to data from American steelmaker Nucor, which estimated that only 18% of imported steel volumes into the U.S. would be subject to the new 25% tariff. Since Mr. Trump’s election in November last year, shares of Gerdau and other U.S. steelmakers have gained more than 15%, XP noted.

However, multinational companies such as Ternium and ArcelorMittal are expected to be among the hardest hit if the 25% tariff on steel and aluminum imports is enacted.

So far, the U.S. president has not announced additional tariffs on steel and aluminum, which have been subject to a 25% duty since the first Trump administration. Still, Brazilian mining giants like Vale and CSN Mineração could be affected if the trade conflict increases uncertainty around Chinese exports, driving down iron ore prices—the core business for both companies.eyond the additional 10% tariffs on Brazilian imports to the United States, investment analysts are more concerned about the new trade conditions likely to arise from a trade war between the U.S. and China.

Experts from banks and brokerages agree that Brazilian companies with more global operations will be better positioned to mitigate the effects of these changes.

However, there’s still a lot of uncertainty about the direction of U.S. policy, with frequent shifts in government decisions, making it more complex for analysts to clearly identify winners and losers.

The case of Iochpe-Maxion exemplifies this difficulty. The automotive parts and components manufacturer was flagged by J.P. Morgan in early April as one of the sector’s companies most affected by the tariffs. However, this analysis was made before the possibility of exemptions for vehicles and parts imported by the U.S. emerged.

According to recent reports, U.S. President Donald Trump might be considering possible exemptions to give companies in the sector more time to establish factories in the U.S.

If this happens, there could be positive impacts if Iochpe remains exempt from direct tariffs, according to UBS BB. This also applies to Tupy, another publicly traded auto parts manufacturer.

Brazilian companies would be indirectly affected by tariffs on light vehicles exported to the U.S. that contain parts manufactured in Mexico, a country where they have operations and which faces additional 25% tariffs. In the worst-case scenario, without an exemption, J.P. Morgan estimated up to a 6% impact on the revenues of both companies. Additionally, the bank reiterates the potential effect of reduced demand caused by the tariffs.

This is the same concern for analysts at XP, who highlight the potential price increases that could negatively influence volumes or pressure the supply chain by distributing additional costs.

The British newspaper “Financial Times” reported that Trump might be planning to exempt auto parts imported from China, following intense pressure from industry executives, without, however, altering the tariffs established for other countries.

In the paper and pulp sector, XP does not anticipate significant changes in volumes due to the low production of short-fiber pulp in the U.S., which relies on Brazilian exports. However, analysts at the American bank Truist believe that tariffs may result in lower demand from American companies, according to Dow Jones Newswires. Although the sector has shown resilience during tough times, the tariff hikes could be the decisive factor leading to a broader recession, with weaker demand for paper and packaging.

In Brazil, the impacts are limited for Suzano, considering its relatively low exposure to the U.S., says XP. The decline in pulp prices traded in China is expected to negatively influence the results of commodity exporters, explains Bank of America.

Embraer, with its global operations, continues to defend its “quasi-monopoly” position in the U.S. regional jet market, according to XP. In addition to Brazil, the company has factories in Portugal and the U.S. However, it is still not shielded from the recession threat, believes Citi: an economic slowdown would reduce the momentum for Embraer’s executive and commercial jet orders, as well as pose risks of higher and more aggressive tariffs.

The case also applies to WEG – identified by analysts as one of those with limited impacts – which still worries XP, considering the cyclical nature of the company’s portfolio, exposed to commodities. Approximately 8% of the company’s revenue comes from exports to the U.S.

“While the domestic scenario in the U.S. remains uncertain, we see room for WEG to expand its local production by accelerating capacity utilization at Marathon facilities, reducing reliance on other regions if this proves beneficial,” says the brokerage. Marathon, acquired by WEG in 2023, has operations in various countries, including the U.S.

In the steel industry, Gerdau is seen as a beneficiary due to its operations in the U.S., but it remains exposed to a recession. About 50% of the company’s EBITDA (earnings before interest, taxes, depreciation, and amortization) comes from its North American division, calculates XP. “If tariffs indeed increase at these levels, it’s positive news for local producers, including [the American operation of] Gerdau,” opines Itaú BBA. For every 5% increase in the average selling price of Gerdau in the U.S., the company’s EBITDA rises by 12%, according to the bank, which refers to data from the American steel company Nucor, which would have only 18% of steel volumes imported to the U.S. subject to the tariff increase to 25%. Since Trump’s election in November last year, Gerdau and U.S. steel companies’ shares have risen by more than 15%, XP notes.

However, multinational companies Ternium and ArcelorMittal are expected to be the most adversely affected by the implementation of 25% tariffs on steel and aluminum imports.

It’s worth noting that–for now–the U.S. president has not imposed any additional tariffs on steel and aluminum, which have already faced 25% tariffs on exports to the U.S. since the first Trump administration. However, Vale and CSN Mineração could be impacted as the tariff war heightens risks associated with Chinese exports, which would reduce iron ore prices – the main product of these Brazilian companies.

*By Beatriz Kawai* — São Paulo

Source: Valor International

https://valorinternational.globo.com/

 

 

 

04/25/2025

Taxpayers with an average income ranging from R$750 million to R$1 billion annually pay only 1.49% in income tax on average, according to data from Brazil’s Federal Revenue Service obtained by Valor through the Freedom of Information Act.

The tax authority mapped the income positions of more than 141,000 taxpayers who will be impacted by the government’s proposal to tax high incomes to offset the income tax exemption for individuals earning up to R$5,000 monthly. The plan is to establish a minimum income tax for those earning above R$600,000 annually.

According to the Federal Revenue Service’s data, based on 2022 figures, three taxpayers declared incomes of R$1 billion or more that year, paying an average of 5.54% in income tax. Meanwhile, the seven taxpayers with incomes between R$500 million and R$750 million paid 2.77%. Taxpayers affected by the minimum tax were divided into 25 brackets. Across all brackets, there is a projection of R$25.2 billion in revenue by 2026, matching the estimated tax waiver for the middle class exemption.

Some experts argue that the rates for the wealthiest demonstrate how minimally progressive Brazil’s income tax system is, considering that high earners use tax-exempt instruments.

Others caution that the data should be evaluated carefully, as it does not reflect the taxation that occurs within the companies of which high-income individuals are partners. This is anticipated to be a contentious issue in Congress, in a project reported in the Chamber by former speaker Arthur Lira (Progressive Party, PP, of Alagoas).

According to the Revenue’s calculations, raising the rate to 10% for taxpayers with incomes over R$750 million annually, as proposed, would generate less than R$500 million in revenue per year, given the few billionaires within this income bracket.

The highest annual revenue, according to the Revenue Service, would come from taxpayers earning between R$1.8 million and R$2.4 million annually, the group most affected by the new taxation. For them, the additional tax would generate R$3 billion in revenue.

Additional revenue will also come from a 10% withholding on dividends for those receiving up to R$50,000 per month per company for Brazilian investors, compared to the same withholding for non-residents, regardless of the amount received.

The National Treasury’s main argument in favor of the bill, according to discussions with secretaries who developed the proposal, is to demonstrate that the majority of the contributing population pays income tax at a rate between 7.5% and 27.5%, while the average rate for the 141,000 high-income individuals affected by the proposal is 2.54%.

Members of the department say that because the proposal increases progressivity, the compensatory measure will be fully defended in its presentation to the National Congress. There is room for “marginal adjustments,” according to a source, but without diluting or even replacing the high-income tax.

Unlike other bills drafted by the National Treasury in recent years, the economic team believes there are few arguments for altering the compensatory measure. When contacted through its press office, the department declined to comment.

Moreover, the proposal has popular support. A survey by the Datafolha institute published earlier this month showed that 76% of the population supports the high-income tax as outlined in the project.

“It’s very hard to oppose making a millionaire pay the same as a nurse,” told Valor earlier this month Marcos Pinto, Secretary of Economic Reforms at the National Treasury and one of the proposal’s architects.

To avoid double taxation with dividend taxation, given that the legal entity has already paid income tax, the government devised a calculation that will add the average rate of the individual with that of the legal entity. If this sum is below 34%, the individual must supplement the tax to reach this level. If it exceeds, the withheld dividend will be refunded.

“The data underpinning the proposal reveal the lack of fiscal justice and progressivity in our personal income tax system, and the idea of a minimum tax aligns with the principles of tax justice and contributive capacity,” assessed Lina Santin, a researcher at the FGV’s Fiscal Studies Center.

According to her, despite some necessary improvements, “any project that seeks to attribute greater progressivity to income taxation by focusing on a minimum tax at the top of the pyramid is indeed fulfilling and adhering to these constitutional principles, aiming to reduce inequalities.”

“I think we need to contextualize the numbers a bit because these people have already paid on the corporate side,” countered Adriano Subirá, a Federal Revenue auditor currently working for the Chamber of Deputies.

A point raised by lawmakers is that the minimum income tax to be collected from high-income individuals will be calculated based on what was paid through the company, considering that corporate taxation is 34%. “But that’s not the effective rate paid by companies,” the auditor notes. In practice, they collect something like 22% to 25% in income tax. Thus, the reference should be 25%, he opined.

Another factor to consider, the expert said, is that corporate taxation often falls below 34% due to accounting loss deductions and other adjustments. “These may reduce the effective tax, but it doesn’t mean the person is undertaxed.” This should also be considered, he evaluated.

The bill probably will go through some changes in taxation rates for the wealthiest, but not in the new exemption bracket. Mr. Subirá says the sentiment in Congress is that the bill has support from about 60% of lawmakers. There are those opposed, but they are weighing the political cost of opposing it.

Revenue figures show that the cost of increasing the exemption bracket will be borne by the middle-income brackets between the wealthiest, the auditor observed. Those at the top of the income scale will find legal ways to circumvent the tax increase, such as reducing dividend distributions.

“It’s natural that there’s greater potential for revenue in the bracket between R$1.2 million and R$3.6 million because there are many more people in this income range,” commented economist Sergio Gobetti, a researcher at the Institute for Applied Economic Research (Ipea). “Billionaires or ultramillionaires are a minority and may pay individually high amounts, but collectively they represent little.”

This is one reason why the start of the minimum tax shouldn’t be extended to the R$1.8 million bracket, as proposed by the PP, he commented. “Much less with a rate of only 4%,” he added.

The economist noted that the minimum tax effectively equalizes taxation among high-income individuals, which is currently very variable. Revenue figures show that today rates range from 1.03% to 5.54%, while the minimum tax will raise them to around 9%.

*By Guilherme Pimenta  and Lu Aiko Otta — Brasília

Source: Valor International

https://valorinternational.globo.com/

 

 

 

 

 

04/25/2025

The Extended Consumer Price Index -15 (IPCA-15)–considered a preview of Brazil’s official inflation rate–rose 0.43% in April, following a 0.64% increase in March, the Brazilian Institute of Geography and Statistics (IBGE) reported on Friday (25).

This was the highest rate for the month of April since 2023, when it was 0.57%. In April 2024, the IPCA-15 had increased by 0.21%.

The result exceeded the median of 32 projections from analysts at consulting and financial institutions surveyed by Valor Data, who had estimated a 0.42% increase in April. The range of estimates varied from an increase of 0.37% to 0.54%.

With the April data, the IPCA-15 registered a 5.49% increase over 12 months. As of March, the 12-month result was 5.26%. The cumulative IPCA-15 for 2025, up to April, was 2.43%.

The 12-month result was above the median of the 32 estimates collected by Valor Data, which was 5.48%, with a range between 5.43% and 5.6%. The inflation target set by the Central Bank for 2024 is 3%, with a tolerance of 1.5 percentage points above or below.

Of the nine price categories used to calculate the IPCA-15, five saw an acceleration in increases from March to April. Higher rates were observed in food and beverages (to 1.14% from 1.09%); household goods (to 0.37% from 0.03%); clothing (to 0.76% from 0.28%); health and personal care (to 0.96% from 0.35%); and communication (to 0.52% from 0.32%).

Conversely, there was a slowdown in the rate of increase in housing (to 0.09% from 0.37%); personal expenses (to 0.53% from 0.81%); and education (to 0.06% from 0.07%). Transportation reversed direction (to -0.44% from 0.92%).

The IPCA-15 is a preview of the IPCA, which is calculated based on a typical consumption basket for families with incomes between one and 40 minimum wages. The indicator covers nine metropolitan regions (Rio de Janeiro, Porto Alegre, Belo Horizonte, Recife, São Paulo, Belém, Fortaleza, Salvador, and Curitiba), in addition to the cities of Brasília and Goiânia. The difference from the IPCA lies in the collection period and geographic coverage.

Inflation became more widespread among the items comprising the IPCA-15 in April. The Diffusion Index, which measures the proportion of goods and services that experienced price increases in a given period, rose from 61% in March to 67.8% a month later, according to calculations by Valor Data considering all items in the basket.

Excluding food, one of the more volatile groups, the indicator also rose to 67.8% from 60%.

*By Lucianne Carneiro, Valor — Rio

Source: Valor International

https://valorinternational.globo.com/

04/22/2025 10:02 AM  Updated um dia

Following the extended holiday weekend, at least four companies are set to conclude debenture offerings totaling R$2.27 billion. Neonergia Pernambuco, Mineração Morro do Ipê, Cirklo, and Autogeração Solar are all finalizing their issuances this week.

Two additional companies—Cielo and Votorantim Cimentos—have ongoing offerings but are expected to wrap them up in May. Cielo is aiming to raise R$3 billion, while Votorantim Cimentos plans to issue R$1 billion.

Among the deals set to close this week, the largest comes from Mineração Morro do Ipê. The mining company, controlled by Mubadala and Trafigura, manages operations in the Serra Azul region, which includes the municipalities of Brumadinho, São Joaquim de Bicas, and Igarapé in Minas Gerais.

The company is seeking R$1.02 billion through seven-year debentures. Part of the issuance will offer returns of CDI (Interbank Deposit Certificate) plus 3.27%, while the remainder will pay CDI plus 2.45%. Settlement is scheduled for April 25.

Neonergia Pernambuco plans to issue R$700 million in tax-exempt debentures, which offer income tax exemption for individual investors. These seven-year bonds will also be settled on April 25, although the final yield has not yet been defined.

On April 24, special-purpose company Autogeração Solar is set to complete a R$330 million offering of 18-year tax-exempt bonds. The proceeds will be used to build a photovoltaic plant.

Cirklo, a company focused on plastic recycling, will launch its first debenture offering in the market, raising R$220 million. The notes are labeled as green bonds. Proceeds will go toward debt refinancing and strengthening the company’s cash position, with a commitment to allocate the same amount to green projects. Settlement is expected on April 22.

*By Rita Azevedo, Valor — São Paulo

Source: Valor International

04/23/2025


Latin America is emerging as a relative winner in a rapidly changing global landscape, with Brazil poised to benefit from the trend, according to Santander Executive Chair Ana Botín.

Speaking Tuesday at an event hosted by the bank at its New York headquarters, Ms. Botín pointed to geopolitical and economic factors creating momentum for deeper integration between Latin America and the United States. She said the reconfiguration of the global order is here to stay, noting that the shift in global supply chains is opening up opportunities to serve markets such as China. “I believe Latin America will continue to come out ahead—relatively speaking—even if it’s hard to make precise forecasts.”

Brazil, in particular, may be less vulnerable to short-term inflationary pressures stemming from new trade tariffs due to its relatively closed economy, Ms. Botín said. At the same time, the country has room to expand its export base. “We’re already seeing increased demand for soybeans from China,” she said. “There will be volatility, but the outlook for Brazil is positive.”

Europe, too, is beginning to benefit from the new global context. According to Ms. Botín, some of the world’s largest institutional investors—mainly American—are shifting more capital toward Europe while reducing exposure to the U.S. “We held a financial sector conference in London a few weeks ago, and I’ve never seen this much interest in European investment,” she said. “There is a rebalancing of capital from the U.S. to Europe.”

In this environment, Ms. Botín expressed support for finalizing the long-delayed trade agreement between the European Union and Mercosur. “All the work is done. The only thing left is the signature,” she said. “There is a lot of interest from Europe in moving forward with the deal, which we know depends on one major European country—I won’t name it, but it’s not Spain or Germany,” she added, referring to France.

Ms. Botín argued that Latin American countries are better positioned today than in past decades to navigate the evolving global order. “Institutional strength has improved. We had a decade of growth, and the region’s fundamentals are more solid now than in previous cycles.”

Praised earlier this year by U.S. President Donald Trump for her “fantastic job” leading Santander, Ms. Botín avoided direct criticism of his trade policies. The Spanish bank has a significant presence in the United States. Rather than challenge President Trump’s rhetoric head-on, she has opted to highlight the opportunities his approach might create for Europe. A month ago, she remarked that Europe is awakening, and the alarm clock has been President Trump.”

She also took a measured tone when addressing Mr. Trump’s recent pressure on Federal Reserve Chair Jerome Powell, which has stirred volatility in financial markets. Ms. Botín emphasized the critical role central banks play as anchors of financial stability and stressed the importance of preserving their independence. “It’s not unusual for governments and central banks to have different views—that’s something we need to monitor,” she said, adding that she is confident that institutional independence “will be upheld.”

Declining to speculate on the Fed’s next moves, Ms. Botín said Santander is working with a baseline scenario that sees interest rates in Europe falling to 2% by year-end. In the U.S., she added, any slowdown in economic growth would logically lead to a recalibration of interest rates.

She reiterated that Santander works with all governments in the markets where it operates—and that will remain the case under President Trump.

By Talita Moreira — New York

Source: Valor International

https://valorinternational.globo.com/

04/23/2025


Alexandre Silveira — Foto: Heka Producciones/Valor
Alexandre Silveira — Photo: Heka Producciones/Valor

Energy transition, particularly the challenges of expanding renewable energy, took center stage at the third panel of the Summit Valor Econômico Brazil-China 2025, held Wednesday in Shanghai. Brazilian Minister of Mines and Energy Alexandre Silveira stressed the need for multilateralism to confront the climate crisis. “COP30 will be an opportunity to link sustainability to social development and highlight the economic value of natural assets like renewable energy and biodiversity,” he said.

Liu Dehua, executive director of the China-Brazil Energy Center at Tsinghua University, noted that with the United States backing away from climate commitments, Brazil and China have emerged as the most important players in the global climate agenda. “We now have many opportunities for mutual cooperation,” he said, pointing to the role Brazilian biomass could play in China’s plan to reach net-zero carbon emissions by 2060.

Jorge Arbache, professor of economics at the University of Brasília and a consultant to the Climate and Society Institute, said Brazil is well positioned to contribute to a global low-carbon economy and emphasized its alignment with China in the energy transition. “Beyond natural capital and abundant resources, Brazil is attractive to investors because of its low geopolitical risk,” he said.

Panelists also highlighted the potential for technology transfer in Brazil-China cooperation. Victor Zhang, chief energy expert at Huawei Digital Power, said Brazil’s Northeast region has vast wind and solar potential, but its ultra-high voltage transmission networks require dynamic adjustments to maintain voltage stability. “That’s why we’ve developed competitive smart grid solutions and can transfer this technology to support Brazil’s sustainable energy transition,” he said.

Sun Tao, chairman of State Grid Brazil Holding, recalled that the company has been operating in Brazil since 2010 and continues to invest in the country, applying ultra-high voltage transmission technology. “We are closely following the development of renewable energy and the challenge of transmitting this energy from major production hubs in the Northeast to consumption centers in the Southeast,” he said.

Li Yinsheng, president of China Three Gorges International, acknowledged Brazil’s extensive hydroelectric infrastructure but cautioned that climate variability and capacity limits make it necessary to expand installed generation capacity—especially in light of Brazil’s reindustrialization plans. “Hydropower can be part of the solution, but we are also conducting research to develop alternative energy sources in Brazil,” he said.

Li Sisheng, vice president of Power China International, said Brazil’s competitive edge in renewable energy could position it as a destination for tech-related investment, particularly in data centers designed for artificial intelligence. “AI development is extremely energy-intensive, and Brazil has abundant supply from wind, solar, biomass, and green hydrogen,” he noted.

The summit is organized by Editora Globo and Valor Econômico in partnership with the Brazilian Center for International Relations (Cebri) and Caixin Global; with main sponsorship from BRF and Marfrig; sponsorship from Cedae, ApexBrasil, the Ministry of Development, Industry, Trade and Services, the Rio de Janeiro City Hall, CNA/Senar, BYD, and Huawei; and support from Eletromidia, Vale, CNI, the São Paulo State Government, Ports of Paraná, Suzano, São Paulo City Hall, and FIESP.

*By Carlos Vasconcellos — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com

Event highlights business opportunities in agriculture, mining, car making, smart cities, renewable energy, and technology

04/22/2025

In a bid to deepen ties with its largest trading partner, a Brazilian delegation of officials, experts, and business leaders is in China for the start of the Summit Valor Econômico Brazil-China 2025, kicking off tomorrow (April 22) in Shanghai. Organized by Valor Econômico in partnership with the Brazilian Center for International Relations (Cebri) and Caixin Media, the event aims to spotlight investment and cooperation opportunities across key sectors of the economy.

The opening session will feature Maria Fernanda Delmas, editor-in-chief of Valor Econômico; Frederic Kachar, CEO of Editora Globo and Sistema Globo de Rádio (SGR); Marcos Caramuru, Cebri board member and former Brazilian ambassador to China; Zhang Lihui, president of Caixin Media; Hua Zhong, deputy director-general of the National Development and Reform Commission’s Foreign Capital and Overseas Investment Department (NDRC); Shen Xin, vice-president of the Chinese People’s Association for Friendship with Foreign Countries (CPAFFC); Dilma Rousseff, president of the New Development Bank (NDB) and former president of Brazil; Alexandre Silveira, Brazil’s minister of Mines and Energy; and Marcos Galvão, Brazil’s ambassador to China.

A panel on smart cities will bring together Ricardo Nunes, mayor of São Paulo; Jesse Efraim Silva Guimarães, vice-president of the Brazil-China Chamber of Commerce (BraCham); Zhang Jianyu, deputy head of research at the China Council for International Cooperation on Environment and Development (CCICED); Elias Marco Khalil Jabbour, president of Rio de Janeiro’s Pereira Passos Institute; Chen Weiqiang, deputy mayor of Hangzhou; and Gu Haidong, deputy mayor of Suzhou. The session will be moderated by Alan Gripp, editor-in-chief of O Globo.

China’s economic dynamics and their strategic implications for Brazil’s mining and steel sectors will be discussed by Minister Alexandre Silveira; Daniel Abdo, director of International Relations at Sigma Lithium; Tracy Xie, CEO of Vale China; Liu Jianfeng, chief investment officer at CMOC; Liu Qiang, climate director at CIFF; and Joe Zhao, strategy director at Yongfeng Group. Pedro Dias Leite, editorial director at CBN, will moderate the panel.

The energy transition panel will bring together Minister Silveira and experts including Jorge Arbache, economics professor at the University of Brasília, Valor Econômico columnist, and advisor to the Climate and Society Institute (ICS); Victor Zhang, chief energy specialist at Huawei Digital Power; Liu Dehua, executive director of the China-Brazil Energy Center at Tsinghua University; Sun Tao, chairman of State Grid Brazil Holding; Li Yinsheng, president of China Three Gorges International; and Li Sisheng, vice-president of Powerchina International Group.

Agribusiness, a cornerstone of Brazil-China relations, will be the focus of two sessions. The first includes Larissa Wachholz, head of the China program at Cebri; Pablo Gimenez Machado, Asia president of Suzano; Fu Wenge, professor at China Agricultural University; Fernanda Maciel, deputy director of International Relations at CNA-Senar; Guo Junping, assistant director at COFCO Group; and Liu Zhiyong, CEO of CITIC Agriculture.

The second session will address global food security and feature Bruno Machado Ferla, vice-president at BRF; Victor Kengo, engineering director at Portos do Paraná; Yao Jun, CEO of Changrong Group; Gao Guan, vice-president of the China Meat Association (CMA); and Lin Di, sustainable development director at Mengniu Dairy.

Investment opportunities in Brazil will be discussed by Claudio Castro, governor of Rio de Janeiro; Rui Gomes, president of Invest São Paulo; and Victor Queiroz, head of ApexBrasil’s office in China.

Financial cooperation to drive sustainable growth will be addressed by Li Zengxin, executive deputy director at Caixin Global; Marcos Caramuru; Nelson Barbosa, planning director at the Brazilian Development Bank (BNDES); Zhao Genrong, vice-president of the Grandview Institution; Chen Weidong, director-general at the Bank of China Research Institute; and Ben Shenglin, dean of the International Business School at Zhejiang University.

The summit will conclude with a panel on the reinvention of the automotive industry featuring Valor journalist Marli Olmos; Alexandre Baldy, vice-president of BYD; Liu Xiaoshi, vice secretary-general of EV100; Rodrigo Zeidan, professor at NYU Shanghai and Fundação Dom Cabral; Zhu Xichan, professor at Tongji University; and Li Fang, director at the World Resources Institute (WRI).

The summit is sponsored by BRF and Marfrig (master sponsors); Cedae, ApexBrasil, Brazil’s Ministry of Development, Industry, Trade and Services, Rio de Janeiro City Hall, CNA/Senar, BYD, and Huawei; and supported by Eletromidia, Vale, CNI, the São Paulo state government, Portos do Paraná, Suzano, São Paulo City Hall, and FIESP.

Source: Valor International

https://valorinternational.globo.com/
Economists urge the country to reduce barriers, improve competitiveness, and embrace global markets as supply chains realign

04/22/2025


Given the ongoing global trade wars, it is increasingly vital for Brazil to address persistent domestic challenges, including poor logistics infrastructure, bureaucratic obstacles, restricted access to quality education, an ineffective public sector, insufficient credit guarantees, and the overall cost of doing business in Brazil, experts advised Valor.

Experts argue that in addition to Brazil’s well-known reform agenda, the United States’ latest tariff hike should also catalyze the country to open its still highly protectionist economy.

Gesner Oliveira, founding partner at GO Associados and professor at Fundação Getulio Vargas (FGV), likens the current external shock to a scenario where “the water level drops, and the rotting boats begin to surface.”

“In emerging markets, the need for better infrastructure, less bureaucracy, and a streamlined public sector is already pressing—now it’s urgent. Our tolerance for inefficiency is shrinking rapidly. Only the most competitive economies will survive,” he said.

According to him, the three most critical reforms Brazil needs to seize the moment—what he calls the “Trumpist wave”—are improvements in physical infrastructure, education and vocational training, and rationalization of the public sector.

Amid global instability, Mr. Oliveira sees an opportunity for nations and businesses to rethink their supply chains. He suggests that if Brazil enacts necessary reforms, it could emerge as a strong alternative. “It’s as if everything has been reset, and countries are reconsidering their suppliers. If Brazil can prove itself as a competitive economy with stable market access and quality products, it could benefit from this new order,” he stated.

In this shifting trade landscape, competitive capacity becomes a “matter of life and death,” said Rafael Cagnin, executive director of the Institute for Industrial Development Studies (IEDI). “Improving Brazil’s competitiveness has always been vital, but now it’s critical. The country will only benefit from emerging opportunities if it reaches a competitive level closer to global standards.”

Mr. Cagnin pointed out that Brazil’s high production costs—known as the “Brazil cost,” which compares unfavorably with the average cost structures of OECD countries—“suffocate the country’s ability to seize opportunities and address new challenges.”

Taking a more optimistic view, Aldemir Drummond, strategy professor at Fundação Dom Cabral, sees opportunities for Brazilian sectors with natural competitive advantages, particularly in energy and food security. “In a world where the only certainty is uncertainty,” he said, “Brazil won’t benefit across the board, but there’s room to capitalize in key areas.”

Given the country’s “glaring” fiscal constraints, Mr. Drummond argues that the government should act more as a facilitator than as an investor in the necessary reform agenda. “Nothing is ready yet—Brazil has a lot to do. However, with the fiscal bottleneck we face, the government must focus on enabling reforms rather than directly funding them. Infrastructure is a prime example, where concessions could be accelerated,” said Mr. Drummond, who coordinates the Imagine Brasil project.

Mr. Oliveira noted that Brazil is currently experiencing record levels of infrastructure investment through both traditional privatizations and public-private partnerships (PPPs), strategies being pursued across the political spectrum and at several levels of government.

Another area where Mr. Drummond sees both need and opportunity is in strengthening credit guarantee mechanisms to help stimulate private investment despite high interest rates. “The government could facilitate this by offering guarantees through investment banks or public financial institutions. While it wouldn’t yield immediate results, it could drive progress in the short to medium term.”

According to Mr. Drummond, closer coordination between the public and private sectors is essential for reform. He believes Brazilian society still tends to expect the government to solve all major problems. “It’s important to engage the private sector and promote a convergence of public and private interests, as has worked in the past. Too often, the private sector still seeks subsidies. That may be acceptable for a limited time, but it requires targets and accountability.”

Among the reforms on Brazil’s to-do list, Fernando Veloso, a researcher at FGV’s Brazilian Institute of Economics (FGV Ibre), highlights trade liberalization as the most important. He also sees Brazil potentially benefiting from the ongoing restructuring of global supply chains—but only if the country abandons its protectionist stance. “Brazil needs to finally break from its closed-economy tradition and integrate with global markets by reducing tariffs and non-tariff barriers. There was some liberalization in the 1990s, but little progress since,” Mr. Veloso said.

While the U.S. appears to be retreating from global trade, the same is not true for the rest of the world, he noted. Trade liberalization could better position Brazil for this new environment.

In his view, Brazil has made progress with the approval of tax reform, even if the transition period is long, and has a well-defined reform agenda, including infrastructure upgrades and better credit guarantee mechanisms. “But trade liberalization remains the most delayed agenda item,” he warned.

Mr. Cagnin also supports reinforcing the commercial focus of Brazil’s diplomacy but believes that protective measures are still needed to counter unfair competition.

“It would be good to have a more active foreign trade policy aligned with industrial development goals—using all tools available to guard against unfair competition. Diplomacy could lean more in that direction,” he said.

In a recent Folha de S.Paulo newspaper op-ed, Santander Brasil chief economist Ana Paula Vescovi also emphasized the importance of reforms in the current context.

“Structural reforms are increasingly necessary to enhance competitiveness without resorting to subsidies, which would only worsen public finances and raise interest rates,” she wrote.

According to Ms. Vescovi, progress in tax, administrative, and regulatory reforms could improve systemic efficiency and reduce the Brazil cost, helping mitigate the effects of foreign trade barriers. “By signaling efforts to boost corporate competitiveness—rather than isolating itself, Brazil can turn this challenge into an opportunity and stand as a reliable supplier in global chains that will be increasingly vulnerable to instability,” she added.

*By Lucianne Carneiro — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/
Already active in the country through its subsidiaries Alta Genetics, Genex, Transov, and Vas, the American company now plans to bring all other bovine genetics firms in its portfolio to Brazil

04/17/2025


Already active in Brazil through subsidiaries Alta Genetics, Genex, Transova, and Vas, U.S.-based Urus has announced it will begin full-scale operations in the country starting in June. With the expansion, the company will introduce all other bovine genetics businesses in its global portfolio to the Brazilian market, bringing the group’s total operations in the country to eleven.

“This study has been underway for the past two years, with the companies entering individually. Now, they’ll be integrated, and we’ll undoubtedly offer a much stronger solution to the market,” said Heverardo Carvalho, current director of Alta Brasil.

As of June, Mr. Carvalho will step into the role of director of Urus, while Tiago Carrara, currently Alta’s market manager, will assume leadership of Alta Brasil. “Our goal is to work together more efficiently to deliver more consistent results for our clients,” said Mr. Carrara.

With the expanded presence of its parent company, Alta expects to grow 15% in 2025, compared to 8% in 2024. Genex, meanwhile, is forecasting 17% growth this year, up from 15% in 2023.

The group does not disclose revenue figures but reports that Alta and Genex currently account for roughly 45% of Brazil’s bovine genetics market.

“We anticipate double-digit growth over the next two to three years, capitalizing on the upward cycle in cattle breeding,” said Sergio Saud, Genex’s sales leader.

To support the arrival of additional brands, the group will invest R$10 million in a new distribution center in Uberaba (MG). Among the new additions to the Brazilian market will be Genetics Australia—acquired by the group last year—which specializes in tropical livestock.

Other brands in the portfolio include PEAK, a global leader in bull production for genetics centers; SCCL, which converts bovine colostrum into biological products for calf health; and Jetstream Genetics, known for premium Holstein and Jersey dairy cattle.

“Expanding our portfolio will become a much stronger reality from now on, and that’s exactly why we’ll need a more robust structure,” said Mr. Carvalho.

*By Cleyton Vilarino — São Paulo

Source: Valor International

https://valorinternational.globo.com/