Analysis: New licensing framework ignores climate crisis

Scientists, business leaders, and environmentalists call licensing bill worst environmental rollback in Brazilian history

07/17/2025 

In the entirety of Bill 2,159/2021—legislation designed to overhaul Brazil’s environmental licensing process—the word “climate” does not appear once. This omission serves as a telling indicator of the bill’s intent. Proponents, especially conservative factions within agribusiness, mining, and industry, frame the bill as a modernization effort. But its complete disregard for the ongoing climate emergency signals a step backward, enshrining outdated principles and representing, according to environmentalists and scientists, one of the most severe socio-environmental regressions in the country’s history.

“Apparently, climate isn’t considered relevant for a law that’s fundamental to Brazil’s environmental protection system,” says Suely Araújo, former president of the Brazilian Institute of Environment and Renewable Natural Resources (Ibama) and current public policy coordinator at the Climate Observatory, Brazil’s largest coalition of organizations focused on climate and development. “It’s shameful, especially in 2025. This is a law designed to be obsolete from birth.”

The Brazilian Society for the Advancement of Science (SBPC) is among the many civil society organizations—including industry and commerce groups alongside environmentalists, Indigenous peoples, Quilombola communities, and other traditional groups—opposing what they call the “Destruction Bill.” Backed by over 160 organizations, SBPC issued a manifesto outlining the bill’s effects according to scientific consensus: it weakens the mechanisms for analyzing, controlling, and supervising potentially destructive and polluting projects.

Of Brazil’s six major biomes, four—Amazon, Cerrado, Pantanal, and Caatinga—are approaching irreversible tipping points. “Crossing these thresholds could trigger ecological collapse, destroying ecosystem services essential to life,” scientists warn. They recommend halting native vegetation destruction, combating wildfires and environmental degradation, and urgently scaling up restoration efforts. These recommendations stand in stark contrast to the bill’s deregulatory agenda.

The criticisms don’t stop there. In addition to endangering key biomes, the bill undermines the Atlantic Forest Law—protecting a biome that has already lost 76% of its original cover—and is incompatible with Brazil’s climate commitments under the Paris Agreement. Its approval would also undercut Brazil’s leadership aspirations ahead of COP30, scheduled for November in Belém.

Critics point to several dangerous and controversial provisions. The bill exempts a wide range of agricultural activities from environmental licensing, regardless of their environmental impact. It shifts responsibility onto developers by allowing medium-sized projects with moderate pollution potential to receive automatic approval based on self-declaration. Even worse, oversight of these licenses would rely on random sampling.

Such provisions may sound plausible in an ideal world—not in Brazil, where efforts are ongoing to protect standing forests, enforce environmental laws, and safeguard Indigenous and Quilombola communities from forced displacement caused by infrastructure projects.

The bill also excludes important input from non-licensing agencies such as Funai (the Indigenous affairs agency), ICMBio (biodiversity conservation), and Iphan (cultural heritage). Moreover, it detaches licensing from water usage rights, ignoring crises like those in the Cerrado, where over half of municipalities have seen surface water supplies drop by 30%. Nearly 80% of Quilombola territories and 32% of Indigenous lands—awaiting legal recognition—would be disregarded in the licensing process.

Researchers Júlia Benfica Senra and Gesmar Rosa dos Santos highlight further risks. The bill presumes state and municipal authorities have the capacity to assess environmental impacts, which is far from the case. “The bill recognizes real deficiencies in the system but exacerbates them,” says Ms. Senra. “It lowers the bar when it should be raising it.”

*By Daniela Chiaretti — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Brazil faces hurdles replacing Russian diesel supply

Russia became top supplier in 2023, offering discounted fuel

 

 

 

07/17/2025

Brazil could struggle to find alternative diesel suppliers if the United States imposes new sanctions on Russia, experts told Valor. Russia has been the country’s leading diesel source since 2023, offering the fuel at discounted prices amid international trade restrictions.

On Tuesday (15), NATO Secretary-General Mark Rutte warned that countries such as Brazil, China, and India could be affected by secondary sanctions threatened by U.S. President Donald Trump. The proposed measure would impose 100% tariffs on nations buying from Russia, unless Russian President Vladimir Putin agrees to a peace deal in Ukraine within 50 days.

From January to June, Russia was Brazil’s top diesel supplier, accounting for $2.5 billion in exports, according to data from Brazil’s Ministry of Development, Industry, and Foreign Trade (MDIC). The United States ranked second, with $1 billion. Currently, domestic production meets 70% of Brazil’s diesel demand, with the remaining 30% filled through imports.

According to Felipe Perez, an analyst at S&P, Brazil would face difficulties sourcing diesel elsewhere amid already tight global inventories. “If tariffs are extended to fuels, U.S. diesel will become less competitive for Brazil. India could be an option, but it is also a major importer of Russian diesel and could be subject to the same sanctions,” he said. Mr. Perez said Nigeria and Middle Eastern countries remain potential suppliers, though high freight costs and limited volumes could make them less viable.

Russia emerged as a key player in Brazil’s diesel imports in 2023, after Western sanctions over the war in Ukraine shut the country out of its traditional markets. To attract new buyers, Russia offered discounted fuel, prompting increased purchases by Brazil, India, and China.

That same year, Moscow temporarily halted diesel and gasoline exports to contain domestic price spikes, as crude oil prices neared $100 per barrel. The short-lived export ban heightened global concerns over the reliability of Russian supply, which is rarely governed by long-term contracts.

According to MDIC, Brazil set a record in 2023 by importing $4.5 billion in diesel from Russia. That trend has continued into 2024, with Russian diesel purchases totaling $5.4 billion—well ahead of the $1.4 billion in imports from the U.S. For comparison, in 2022, Russian diesel accounted for just $95 million in Brazilian imports, ranking Russia eighth among suppliers. That year, the U.S. led the list, with $8 billion in sales.

Sergio Araujo, president of the Brazilian Association of Fuel Importers (ABICOM), said Brazil will likely face a challenge in finding an alternative supplier that can meet its needs. The situation would worsen, he said, if sanctions also affect China and India, creating global demand that outpaces supply. “That scenario would shake up the market. The U.S. could be an alternative, but I’m not sure U.S. refineries have the capacity to scale up production enough,” said Mr. Araujo. “If global supply falls short, prices will surge, adding pressure to inflation.”

ABICOM members importing Russian diesel are waiting to see if Mr. Trump’s threats materialize. According to an industry source, most Russian diesel buyers in Brazil are independent operators.

Asked for comment, Acelen, the owner of the Mataripe refinery in Bahia, said it does not purchase Russian diesel. Raízen declined to comment, while Vibra did not reply to Valor’s request for comment.

Petrobras also said it does not buy crude oil or refined products from Russia. In a statement, the state-run company said diesel imports are driven by market conditions. “Petrobras’s global operations, through its international trading subsidiaries, allow it to import from a range of suppliers, primarily from the U.S., India, and the Persian Gulf region.”

Thiago Vetter, an analyst at StoneX, sees NATO putting pressure on Brazil and other nations, but said the likelihood of sanctions being enforced remains low. “I consider the chance of secondary tariffs on Russian buyers remote, given the importance of these markets to the U.S. economy,” he said. In his view, even if Russian diesel were cut off, there is little risk of a fuel shortage in Brazil. Companies could replace Russian diesel, but it would come at a higher cost, he added.

*By Kariny Leal  — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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Leadership gap reflects racial inequality in workplace

Experts call for structural changes as Black professionals remain underrepresented at the top

 

 

07/15/2025 

Although Black Brazilians represent 55.5% of the population, according to the official statistics agency IBGE, they hold just 9.7% of top leadership roles—defined as executive management and above. The data comes from a study carried out between 2022 and 2025 by Diversitera, a consulting firm that analyzed approximately 70 companies across various sectors and sizes.

According to Jaime Almeida, vice president of the FESA Group—an HR solutions ecosystem—and director of diversity and inclusion at the São Paulo chapter of the Brazilian Association for Human Resources (ABRH-SP), this underrepresentation has historical roots.

“It hasn’t been long since the so-called ‘pseudo liberation’ of Black people after slavery, so they still haven’t been able to access spaces like universities and, as a consequence, are underrepresented in leadership roles,” he said.

He added that only 0.4% of executive board positions are held by Black women, according to the Ethos Institute. “That’s even more disgraceful when you consider they are the largest demographic group in the country. It’s impossible to see that as normal,” he said.

Mr. Almeida also cited a 2018 McKinsey report: “Companies with gender equity are about 21% more profitable than the sector average. Those with racial and ethnic equity show roughly 33% higher profitability,” he noted.

To change this scenario, Mr. Almeida recommends that companies begin by conducting a demographic survey of their workforce. Once they understand their internal makeup, he advised sharing this data with senior leadership. “By developing training programs for executives, we can encourage real reflection and help the company define where it wants to go—over the next year, five years, ten years. How it wants to transform itself,” he said.

In his view, racism often begins with the discomfort some people feel when they see professionals who don’t fit the traditional mold of white leadership in positions of power. “A Black person who is assertive is perceived as aggressive; an assertive woman is seen as unbalanced. A white man is viewed as firm, a strong leader,” he noted.

He also pointed out that unconscious bias is the root of all prejudice—and challenges anyone to mentally list five Black CEOs widely regarded as good leaders. “Most people won’t even be able to start that list,” he said.

Mr. Almeida shared his personal experience to illustrate the issue: “I spent 32 years in the pharmaceutical industry, 26 of them in leadership positions, and the last 20 as a director. During those 20 years, I was the only Black director at the company. In all my professional life, I rarely saw another Black person in the same room. Likewise, in 24 years teaching in higher education, I’ve never had a Black colleague in the faculty lounge.”

To address the problem, Marcus Kerekes, founder and CEO of Diversitera, said that diversity should not be treated as a one-off campaign but as an ongoing, structured effort. “From a social standpoint, inclusion in the workforce generates income and brings people into the economy. The Black population is the largest demographic in Brazil, yet for years it has been relegated to niche markets,” he said.

Mr. Kerekes also noted that the closer a company is to the end consumer, the more likely it is to have diverse leadership. “We hypothesize that there is pressure from more discerning and conscious consumers,” he said.

Luciene Malta, senior institutional relations manager at MOVER (Movement for Racial Equity), believes promoting Black professionals to executive roles requires clear commitments, structured career and succession plans, and sustained action. “All goals require investment to be achieved. The same must apply to diversity, equity, and inclusion,” she said.

For Ms. Malta, it’s not just about developing Black professionals—it’s also essential to prepare the workplace to welcome them. “Investing in a cultural shift and educating leadership is fundamental,” she added.

(Under the supervision of Fernanda Gonçalves, assistant editor for the Careers desk)

*By Rafaela Zampolli*, Valor — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Previ exits BRF, rejecting Marfrig offer

Pension of Banco do Brasil workers sheds stake after 30 years as investors, citing better price from market

 

 

 

07/15/2025 

One of BRF’s longest-standing shareholders, the pension fund for Banco do Brasil employees, has opted not to wait for the outcome of the merger with Marfrig. Previ closed its historic position last Friday (July 11), selling off its remaining shares, according to Pipeline and confirmed by the fund.

Previ had been a shareholder since the 1990s, originally through an investment in Perdigão, and remained in the company after its 2009 merger with Sadia. The fund was among the investors dissatisfied with the share swap terms proposed by Marfrig for the merger with BRF, arguing that it secured a better price for its beneficiaries by selling on the open market.

“The shares were sold at a price higher than what would have been offered to minority shareholders through the appraisal rights process if the BRF-Marfrig merger were finalized,” Previ said in a statement, emphasizing its more than 30-year history with the company.

“Previ believes the proposed exchange ratio in the merger does not adequately reflect BRF’s value, potentially leading to losses for minority shareholders and, by extension, for our members. By exiting before the merger’s completion, Previ protects participants’ assets and reaffirms its commitment to technical, well-founded decisions aligned with the best interests of the pension plan,” the statement added.

Previ’s exit rattled investors, with BRF shares dropping 4.55% on B3.

The fund’s departure may weaken the push by minority shareholders seeking better merger terms. Previ, along with asset manager Latache and a member of the Fontana family, had appealed to the Securities and Exchange Commission of Brazil (CVM), successfully delaying the shareholder meeting to vote on the merger twice—the latest postponement, granted last Friday, extended the process by another 21 days.

They are demanding further disclosure of the valuation study underpinning the share price and have also raised concerns about the involvement of Marfrig’s controlling shareholder, Marcos Molina, in the merger vote.

Meanwhile, Marfrig and Mr. Molina continue to buy up BRF shares. The company disclosed that its combined stake, together with Molina’s MAMS fund, has reached 58.87%. When the merger was announced in May, Marfrig held 50.5% of BRF. This increased stake means the merger could be approved even without minority shareholder support.

BTG Pactual has also been purchasing BRF shares in recent days. The bank disclosed it now holds a 7.79% stake in BRF and has derivatives involving call and put options on the stock. BTG did not specify whether the position is proprietary or on behalf of a client.

This article was originally published by Pipeline, the business news platform of Valor Econômico.

*By Maria Luíza Filgueiras — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Economic activity slows following record-breaking harvest

Weak IBC-Br reading triggers GDP downgrades amid concerns over Trump tariffs

07/15/2025

Brazil’s economy showed clearer signs of cooling in May, following the boost from a record-breaking harvest this year. The slowdown comes as economists weigh the mixed impact of announced fiscal stimulus measures against potential fallout from the tariff shock led by U.S. President Donald Trump.

The Central Bank’s Economic Activity Index (IBC-Br), often viewed as a GDP proxy, fell 0.74% in May from April on a seasonally adjusted basis. The result, released on Monday, was below even the most pessimistic forecasts compiled by Valor Data—Valor’s financial data provider—which ranged from a 0.5% contraction to a 0.5% expansion, with a median of -0.1%. The unexpected drop has prompted analysts to revise down their 2025 growth forecasts.

In April, the IBC-Br had posted a marginal increase of 0.05% (revised from 0.16%). Over the 12 months through May, the index rose 4.04%.

“The weakness in activity was broad-based, with monthly declines in agriculture (-4.25%) and non-agricultural sectors (-0.31%). Industry contracted 0.52% while services were flat, up just 0.01%,” wrote Alberto Ramos, chief economist for Latin America at Goldman Sachs, in a note to clients. According to his estimates, the statistical carryover for second-quarter growth dropped from 0.83% in April to 0.16% in May.

Rafaela de Sousa, an economist at BuysideBrazil, pointed out that this was the first monthly decline of the year for both the overall index and its non-agricultural component, reinforcing the narrative of weak activity in the second quarter. She warned that this is an important risk to monitor, given the potential impact of the U.S. tariffs.

BuysideBrazil maintains a 2025 GDP growth forecast of 2.3% but estimates that tariffs could affect up to 30% of Brazil’s exports to the U.S. Under that scenario, the economy could lose as much as 0.6 percentage point of GDP over a 12-month period, with most of the drag occurring in 2026, said Ms. de Sousa.

XP Investimentos also sees downside risk to its current forecast of 2.5% GDP growth. According to the firm, Mr. Trump’s tariffs alone could shave up to 0.3 percentage point from growth this year.

Despite the recent data, economist Rodolfo Margato said the labor market and fiscal stimulus, whose effects have yet to show up in the numbers, should help prevent a sharp downturn in domestic activity. He calculates that May’s IBC-Br result leaves a 0.2% statistical carryover for the second quarter, and expects the index to close the period with a 0.3% gain, close to XP’s GDP projection of 0.4%.

Oxford Economics revised its 2025 growth forecast to 2.2% from 2.5%. Still, economist Felipe Camargo does not foresee a major impact from the tariff dispute.

“Our analysis is that the effect on growth will be limited, even if Brazil retaliates. We expect the two countries to reach an agreement in the coming months, though any deal is likely to involve tariffs higher than those in the pre-Trump era,” said Mr. Camargo.

Similarly, ABC Brasil downgraded its GDP forecast for this year to 2.3% from 2.5%. “What stood out to us in the monthly and quarterly breakdown of the IBC-Br was the weaker performance of cyclical sectors, those more sensitive to interest rates,” said Daniel Xavier, the bank’s chief economist. He noted that the services and industrial sectors, which faltered in the May data, also showed a deterioration in FGV’s business confidence index, suggesting further weakness may be ahead.

In terms of monetary policy, Mr. Xavier added that the IBC-Br reading should be well received by the Central Bank, as it aligns with the institution’s scenario of 2.1% growth this year while also indicating cooling in cyclical sectors. “Nonetheless, the output gap remains inflationary, and for that reason, the Monetary Policy Committee (COPOM) is likely to maintain a restrictive stance and keep interest rates at a tight level for an extended period,” he said.

*By Marcelo Osakabe and Gabriel Shinohara  — São Paulo and Brasília

Source: Valor International

https://valorinternational.globo.com/

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The Current Situation of Social Media in Brazil: Limits and Regulations.

MURRAY ADVOGADOS

 

The Current Situation of Social Media in Brazil: Limits and Regulations.

 

By Alexandre Tuzzolo Paulino.

 

The rise of social media as tools for communication and information in Brazil has profoundly transformed social, political, and institutional relationships. This shift has generated a range of legal challenges, particularly regarding freedom of expression, data protection, and liability for published content.

Currently, Brazil does not have a specific and consolidated law that fully regulates the operation of social media. Existing legislation is fragmented and relies on norms such as the Brazilian Internet Bill of Rights (Law No. 12,965/2014), which establishes principles for internet use, such as neutrality, privacy, and user accountability. Additionally, the General Data Protection Law (LGPD – Law No. 13,709/2018) governs the processing of personal data, directly affecting platforms that collect and use user information. Under discussion in the National Congress is the so-called “Fake News Bill” (Bill No. 2630/2020), which seeks to establish a legal framework to combat disinformation on digital platforms.

The current landscape highlights the urgency of establishing a balanced legal framework that ensures freedom of expression and technological innovation, while also setting clear limits on the circulation of content harmful to public discourse and the democratic rule of law. The challenge is to create effective regulations without leading to censorship or digital authoritarianism.

Despite progress in legislative debate, the regulatory gap has been partially filled by rulings from the Federal Supreme Court (STF), which has ordered the removal of content, the suspension of user accounts, and the imposition of liability on platforms.

In June 2025, the Federal Supreme Court (STF) ruled that digital platforms can be held liable for illegal content published by users, even without a prior court order, in cases involving serious crimes, hate speech, racism, homophobia, Nazi or fascist ideologies, and other forms of discrimination. This decision reinterprets Article 19 of the Marco Civil da Internet, which previously held platforms liable only after a specific judicial order for content removal.

It is undeniable that combating disinformation and digital violence is a pressing imperative of our time. However, preserving democracy requires institutional balance and respect for due legal process, to avoid lapsing into institutionalized censorship, which would ultimately undermine the very legitimacy of the institutions that are meant to be protected.

July 2025

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Brazil could partner with U.S. clients to negotiate tariffs

Former World Bank director Carlos Braga opposes retaliation strategy and warns of weak BRICS connection, yet rules out “economic collapse”

 

 

 

07/14/2025

Carlos Primo Braga, associate professor at Fundação Dom Cabral (FDC) and former director of Economic Policy and Debt at the World Bank, believes Brazil should ally itself with U.S. industries reliant on Brazilian imports to strengthen its negotiating position with Donald Trump’s administration.

Mr. Braga opposes retaliation and sees room for negotiation, despite the political undercurrents behind the tariff decision announced last week. Because the move was driven by non-economic motives, he also dismisses any meaningful connection between Trump’s actions and Brazil’s membership in the BRICS bloc.

“Obviously, economic reasoning doesn’t explain the tariff hike. From an economic standpoint, the BRICS summit didn’t promote a confrontational agenda. That’s why I see a weak connection when people claim Trump’s action reflects the rise of BRICS,” he said.

Mr. Braga argues that sectors like the U.S. steel industry—which imports semi-finished steel from Brazil as a key input—could be natural allies in lobbying against the 50% tariff. He said the U.S. automotive industry may also have a vested interest in resisting the tariffs, given the potential for rising input costs that could undermine competitiveness.

He criticized what he described as a shift in U.S. trade policy. While in the past the country was an architect of global trade governance, today it is “undermining that very system,” he said, referencing the weakening of the World Trade Organization (WTO)—a trend that accelerated under Mr. Trump but was also seen during the Biden and Obama administrations.

“Mr. Trump simply doesn’t believe in multilateral solutions. Since January, WTO rules, such as the most-favored-nation principle, have been under attack, and he doesn’t care. What will replace this system? The jungle and the law of the strongest. That will undoubtedly generate more tension,” he warned.

Depending on how Trump’s tariff policy evolves toward China and the European Union, Mr. Braga sees potential for mounting domestic opposition and lobbying in the U.S. Congress. “This is also a path for Brazil, working with U.S. industries that depend on Brazilian imports,” he suggested.

Brazil is the second-largest exporter of steel to the U.S. While other countries could theoretically take over the market, Mr. Braga noted that supply disruptions and price hikes would be inevitable in the U.S. “That will reduce the competitiveness of American industry, and I guarantee they are not happy about these tariffs,” he said.

Mr. Braga cautioned that retaliation would be the wrong move for Brazil and could cause more harm than good. While he acknowledged the legitimacy of Brazil’s Economic Reciprocity Law, which allows for countermeasures, he believes it’s not the right strategy for now.

“Retaliation definitely won’t help. It will raise U.S. import costs and increase prices for Brazilian consumers—both people and businesses. We need to stay calm and negotiate,” he urged.

Mr. Braga is also skeptical about any action at the WTO, arguing that although Brazil could win a case on legal grounds, the ruling would have no practical effect.

“Brazil could file a case at the WTO and would certainly win since the tariffs violate WTO rules. But the U.S. would appeal, and with the appellate system paralyzed, the case would remain in limbo without resolution,” he explained.

Although not optimistic about the negotiations, Mr. Braga noted there are areas where the U.S. remains interested in fostering positive relations with Brazil, citing the Alcântara space base partnership as one example.

While he expects some economic impact from the 50% tariffs, Mr. Braga dismissed fears of a broader crisis. “Exports to the U.S. represent about 2% of Brazil’s GDP. It’s not a disaster, the world isn’t ending, but there will definitely be consequences, especially for the most affected companies,” he said.

Mr. Braga highlighted that the greater concern for Brazil’s trade balance lies in the fact that exports to the U.S. are more heavily weighted toward manufactured goods. For agricultural products and commodities, Brazil can redirect exports to other markets.

“For manufactured goods, it’s more complicated. So, it will depend heavily on how Brazil manages the next steps in these negotiations,” Mr. Braga concluded.

*By Lucianne Carneiro — Rio de Janeiro

Source: Valor International

https://valorinternational.globo.com/

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Trump tariffs, EU law disrupt Brazil’s agricultural geopolitics

Shifts in global trade threaten competitiveness and cloud sector planning

 

 

 

07/14/2025

As Brazil’s agribusiness prepares to comply with the European Union’s anti-deforestation law set to take effect in January 2026, the sector now faces a new challenge: a 50% tariff on exports to the U.S. Experts in foreign trade and diplomats with experience in trade negotiations warn that this “perfect storm” could make exports to two of Brazil’s largest markets— the U.S. and the EU—unviable or severely undermine their competitiveness.

According to Ambassador Rubens Barbosa, president of the Institute of International Relations and Foreign Trade (Irice), trade tensions with the U.S. are more serious than the effects of the EU regulation and present a more immediate concern for Brazil.

He notes that in the dispute with the U.S., agribusiness is not the most impacted sector of the Brazilian economy. Mr. Barbosa believes industries like aviation, aluminum, and steel, which export higher value-added and high-tech products, stand to lose more, while agribusiness remains a strong commodity exporter.

“There will be consequences, but we don’t yet know what tariff level Brazil will negotiate with the U.S. Even if it ends up above the previous 10%, we could still remain competitive in agricultural exports, but we’ll need to negotiate,” Mr. Barbosa told Valor.

Still, there are products whose exportation could become unfeasible, such as beef, where the price per tonne could jump by about $3,000, according to projections from Agrifatto. Coffee, orange juice, and eggs are also expected to see shipments severely impacted.

The U.S. remains one of Brazil’s key trade partners, accounting for 12% of exports and 15.5% of total imports in 2024. “If Brazil escalates retaliation, as China did, it could backfire. We have more to lose than gain,” warned Cicero Zanetti de Lima, a researcher at FGV Agro, the agribusiness studies center at Fundação Getulio Vargas.

Roughly 30% of Brazilian exports to the U.S.—about $12.1 billion—come from agribusiness. Conversely, agricultural imports from the U.S. represent just 2.5% of Brazil’s total, primarily inputs. Mr. Lima explained that more expensive U.S. inputs could push up domestic food prices in Brazil.

“Another serious issue is that, with the tariff in place, it will be nearly impossible to divert products like coffee and orange juice originally bound for the U.S. to other markets. This is a red flag,” he said.

Like the U.S., the EU is also one of Brazil’s biggest buyers of coffee and orange juice. With rising protectionist signals, the European Commission has classified Brazil as a standard risk country under the EU Deforestation Regulation (EUDR), which bans imports of products originating from both illegal and legally permitted deforestation under Brazilian law.

There is widespread uncertainty about the required documentation and how the law will be enforced. Rubens Ricupero, a diplomat and former finance minister, highlighted that Brazil’s agribusiness is vulnerable on deforestation issues. He argued this should be an opportunity to crack down on illegal deforesters and reduce Brazil’s risk classification under the EU law. “The sector itself should take the lead in showing it is serious about this issue,” he said.

Because Brazil was rated as a standard risk country under the EUDR, its products are likely to be deprioritized in favor of those from lower-risk suppliers, warned Agroicone managing partner Rodrigo Lima.

“Importers will naturally prefer sourcing from countries with the lowest possible risk to avoid EU fines,” he said. “Even if Brazilian coffee is excellent, buyers may opt for lower-risk suppliers,” he added. Vietnam, for example, is a major coffee supplier classified as low risk.

Marcos Matos, general director of the Brazilian Coffee Exporters Council (Cecafe), said coffee industry representatives traveled to the EU in May after the EUDR risk classification was announced, lobbying for risk to be assessed by region rather than nationally. “We see there is room to educate buyers about Brazilian coffee and the country’s regional diversity,” he said.

In the beef supply chain, competitors like Uruguay have been classified as low risk, while Brazil’s standard risk rating is seen as “unfair” by Caio Penido, president of the Mato Grosso Institute of Beef (Imac), who recently visited Brussels to discuss the issue.

*By Nayara Figueiredo — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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China expands in consumer goods, now supplies 26% of Brazil’s imports

Cars, electronics and home appliances drive Chinese dominance as U.S. loses share

 

 

 

 

07/14/2025 

Brazil’s reliance on American goods has dropped to near the lowest level in a decade, as China strengthens its dominance across a wide range of imports, including consumer products like cars, motorcycles, freezers, and stoves.

From January to June, Brazil imported $21.7 billion from the United States, up 11.5% from the same period in 2024. But this only accounted for 16% of total imports, the second-lowest share in the last ten years, just above the 15.5% in the first half of last year. In 2022, the U.S. share was 19.3%.

Amid China’s search for new markets under the threat of U.S. President Donald Trump’s tariffs, the country exported $35.7 billion to Brazil in the first six months of this year: 26.3% of Brazil’s total imports, a record high and up 22.2%.

China became Brazil’s top car exporter last year, even after Brazil imposed tariffs on electric vehicles. Chinese dominance has also expanded into small appliances and electronics, growing in strategic importance for Beijing.

Despite the introduction of import tariffs last year—starting at 10% in early 2024 and rising to 18% now—pure electric vehicles from China remain Brazil’s most imported cars.

In the first half of this year, Brazil imported $2.05 billion worth of vehicles from China, down from $2.58 billion in the same months of 2024 but up 713% from 2023. Argentina, once a key supplier, trailed far behind at $844 million.

Between 2022 and 2025, Brazil rose from China’s 17th to its sixth-largest vehicle export market, now representing 5.6% of the total.

This trend is mirrored in household appliances. During the second-hottest summer in Brazil’s history—second only to 2024—air conditioner imports from China jumped 67% to $498.5 million in the first half of 2025, after already surging 64% in the same period of 2024. Brazil moved from the 15th to the seventh-largest buyer of Chinese air conditioners from 2022 to 2025.

Imports of Chinese-made vacuum cleaners hit $51 million, up 26% from a year earlier.

Even when values declined, China remained the leading supplier. Imports of electric stoves, grills, and baking pans totaled $98.2 million—down from $113.7 million in 2024—but Germany, the second-largest supplier, shipped just $2.3 million.

Brazil imported $65.6 million in fully assembled televisions from China in the first half. Hong Kong ranked second at $7.1 million. Mobile phone imports from China, including parts and components, totaled $650.6 million, with Vietnam in second place at $291.5 million.

Chinese government trade data confirms Brazil’s growing importance. Between 2022 and 2025, Brazil climbed from 17th to sixth among China’s TV buyers, and from 19th to sixth in irons. It also rose from 16th to 12th in electric stoves and grills.

Brazil’s appetite

Lia Valls, professor at Rio de Janeiro State University (UERJ) and researcher at the Brazilian Institute of Economics of Getulio Vargas Foundation (FGV Ibre), said Brazilian purchases of Chinese goods are rising much faster than total imports. Volume growth, she explained, is especially striking.

In the 12 months through May, Brazilian imports from China rose 25.7% in value, data from the Foreign Trade Secretariat (SECEX) show. The FGV Ibre’s Foreign Trade Indicator (Icomex) puts volume growth at 37.2%.

By comparison, total Brazilian imports rose 12.2% in value and 16.7% in volume. From China alone, volumes jumped 35% in the first five months of 2025, versus a 12.4% increase in total imported volume.

Yet average prices of Chinese goods are falling. Icomex shows a drop of 8.1% in average import prices from China between January and May. Total import prices fell just 2.6%.

U.S. imports, on the other hand, rose 13% in volume over the same period, while prices were nearly flat, edging up just 0.2%. The U.S. remains Brazil’s second-largest supplier.

In February, Brazil imported a large offshore oil platform from China, classified as a non-recurring item. But Icomex data show the surge in Chinese import volumes is a long-term trend.

Between 2015 and 2024, Brazilian imports of Chinese goods by volume rose 146.2%. U.S. volumes increased just 1.1%, and imports from Argentina rose 21.9%. Meanwhile, average prices of Chinese imports fell 14.4%, while U.S. prices rose 50.9% and Argentine prices 7.3%.

Since 2006, China’s import volume to Brazil has multiplied by seven, while its average export price rose just 14%.

Trade surge

José Augusto de Castro, president of the Brazilian Foreign Trade Association (AEB), said imports have proven more resilient than expected this year, partly due to China’s role.

The import surge had a negative impact on Brazil’s GDP in the first quarter, despite a record grain harvest, said Livio Ribeiro, partner at BRCG and researcher at FGV Ibre. “It was very unusual. Even with the bumper crop, net trade dragged down GDP, which was unexpected.”

Data from Brazil’s national statistics agency IBGE show that exports of goods and services rose 2.9% in the first quarter versus the previous three months (seasonally adjusted), but imports climbed 5.9%.

SECEX figures show that China’s share of Brazilian imports rose from 23.3% in the first half of 2024 to 26.3% in the same period this year.

Regardless of the direction of Mr. Trump’s tariff policies, Mr. Castro said, China will continue expanding its export markets. “The world is adapting to this new China, a country that produces everything, competes in everything, and offers competitive prices in everything.”

Mr. Ribeiro said the future of Chinese imports in Brazil will depend less on the U.S. president’s policies and more on the strength of domestic lobbying efforts. “Brazil’s lobbies are stronger than average. Chinese oversupply could flood other countries like Chile or Colombia more than Brazil, where local lobbies are less organized. So Brazil is unlikely to face a full-blown flood of Chinese goods.”

The global tariff debate, he said, has thrown “some sand in the gears of global trade.” China is also struggling to boost domestic consumption and is seeking new markets for its industrial surplus.

Chinese carmakers gain ground

Tulio Cariello, research director at the Brazil-China Business Council, said China’s lead in car exports to Brazil is unsurprising. He noted that import tariffs for electric and hybrid vehicles will continue to rise through next year.

In 2025, electric cars without combustion engines were taxed at 18% through June. The rate rose to 25% this July and is scheduled to reach 35% in July 2026.

New Chinese brands such as GAC, Zeekr, Omoda & Jaecoo, and Leapmotor have followed BYD and GWM into the Brazilian market. “They realized there’s a market for EVs in Brazil. BYD created a positive image for Chinese cars, which are now almost synonymous with electric vehicles,” Mr. Cariello said.

Mr. Ribeiro said higher tariffs haven’t significantly curbed demand for Chinese EVs, which tend to be more expensive and less sensitive to price increases. “Tariffs reduced margins, but that wasn’t fully passed on to consumers. And even if it were, they’d still be cheaper than German or Swedish models.”

Chinese dominance extends to appliances and production chains

In appliances and white goods, Mr. Cariello noted that China’s dominance reflects years of industrial investment. When China opened to foreign investment, many U.S., European, and Japanese firms set up production there. “The Chinese learned, began making their own products, and started competing with global brands. In some cases, like air conditioners, they’re already ahead.”

He added that fierce competition among Chinese manufacturers helps keep prices low.

Chinese companies, said Mr. Castro of AEB, are quick to develop new products and win over markets. Data from SECEX illustrate this: Italy remains Brazil’s top dishwasher supplier, with shipments rising from $42 million in the first half of 2022 to $83 million in the same period this year. But China is catching up fast, doubling its exports to Brazil from $16.6 million to $51.6 million in the same period.

Mr. Cariello pointed out that while China leads in many categories, Southeast Asian countries are gaining ground as Chinese companies shift production for cost savings. In cell phones and parts, for instance, Vietnam and Malaysia follow China. For air conditioners, Thailand and Singapore are next.

“Each case is different, but there’s no doubt China will remain the dominant supplier in many sectors,” he said. “Chinese companies not only ship final products, they also produce key components. Smartphones and computers are good examples. China is involved in every step of the value chain, from critical minerals to components and design. One way or another, China is always present.”

*By Marta Watanabe and Álvaro Fagundes — São Paulo

Source: Valor International

https://valorinternational.globo.com/

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Agricultural bonds to remain top rural credit source despite new tax

Bonds known as LCA expected to exceed R$700bn by 2026 under Crop Plan

 

 

07/11/2025

Agribusiness Credit Bnds (LCAs) are set to remain the leading funding instrument for Brazil’s rural credit programs in the 2025/26 season, even with a proposed income tax on their returns. According to government projections, the outstanding volume of LCAs is expected to reach R$728 billion by May 2026, up from the current R$651 billion. Of this total, about 60% is earmarked for financing the agricultural sector.

The 2025/26 Crop Plan outlines R$594.4 billion in total rural credit, with LCAs accounting for R$328 billion, or 55% of the funding. In the 2024/25 cycle, they represented 43% of the total.

Currently, income earned from LCAs is exempt from taxation. However, the Ministry of Finance has proposed a 5% tax on earnings, included in Provisional Presidential Decree 1,303/2025, which still requires Congressional approval. If passed, the new rule would take effect in 2026. Despite the tax, Gilson Bittencourt, deputy secretary for agricultural policy and agro-environmental business at the Ministry of Finance, believes LCAs will remain attractive to investors.

“The Finance Ministry’s proposal to impose a 5% tax maintains LCAs’ advantage over other fixed-income instruments while also helping to fund interest rate subsidies in rural credit,” said Mr. Bittencourt.

He noted that high interest rates, particularly the current Selic level near 15% per year, made it unfeasible to keep loan interest rates unchanged in the new Crop Plan. “We wanted to avoid raising rates, but the numbers had to add up,” Mr. Bittencourt said during a media briefing after the plan’s release earlier this month. “In agriculture, the lower the rate, the better. But worse than a slightly higher rate is having no funds at all. That was the government’s main concern.”

Mr. Bittencourt also acknowledged that a drop in the Selic rate could reduce demand for LCAs, which are currently among the most profitable investment options. Nonetheless, investor familiarity with LCAs may help sustain demand even in a lower-rate environment.

Looking ahead, Mr. Bittencourt said the “ideal scenario” for agricultural policy would be a Selic rate of 8.5%—a projection that was common among economists and the government earlier in 2024. In such a scenario, LCAs could be issued at 90% of the benchmark rate plus a spread of up to 3%, resulting in single-digit loan interest rates for market-based credit lines. This would also increase the incentive for banks to use their own funds in rural lending, further easing the fiscal burden of subsidies.

However, Ivan Wedekin, a consultant and former secretary of agricultural policy at the Ministry of Agriculture, warned that taxing LCAs could hurt their competitiveness relative to other instruments, such as bank-issued CDBs, which are already taxed. He also voiced concerns about market confidence.

“Taxing one type of instrument sets a precedent. There’s now a risk that the government could raise the tax from 5% to 10% or even revoke exemptions altogether. That creates uncertainty across the market,” Mr. Wedekin told Valor.

The Agricultural Parliamentary Front (FPA) has also criticized the proposed taxation, echoing concerns that it could undermine trust in rural credit mechanisms.

*By Rafael Walendorff, Globo Rural — Brasília

Source: Valor International

https://valorinternational.globo.com/

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