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Brazil export tariffs could escalate ahead of October election
Standard Chartered says the new 25% Section 301 tariff on Brazilian exports takes effect 22 July and a further probe could lift it to 37.5%.
Standard Chartered’s Dan Pan assessed the impact of new US Section 301 tariffs on Brazilian exports, saying a 25% levy is set to take effect on 22 July. Pan also flagged a pending investigation that could raise the final tariff level to 37.5%.
According to FXStreet, Pan argued that the economic hit to Brazil may be contained, in part because wide-ranging exemptions could limit how much of Brazil’s exports are actually affected, and because of Brazil’s diversified trade ties.
FXStreet also noted Pan’s view that the political fallout could be more significant than the direct trade effect. He suggested the tariff situation could strengthen President Luiz Inacio Lula da Silva ahead of Brazil’s October election, potentially weighing against Flavio Bolsonaro.
Pan further compared the proposed tariff levels with last July’s 50% tariff under IEEPA imposed amid concerns tied to Jair Bolsonaro’s trial, according to FXStreet.