Brasilia : Brazil’s industrial sector may face a slowdown. US-imposed tariffs on Brazilian goods threaten to cut exports for the first time in 21 months. The tariffs could also hurt investment and jobs, the National Confederation of Industry (CNI) warned on Wednesday.
CNI’s latest survey shows export expectations fell 5.1 points to 46.6 in August. A reading below 50 points signals contraction. Isabella Bianchi, CNI policy analyst, said the decline is tied to US trade uncertainties.
“The worsening of export expectations is mainly due to the new US trade policy,” Bianchi noted.
A 50 percent tariff on several Brazilian products came into effect on August 6. The tariff is already affecting employment. Industrial jobs declined in July despite rising production.
The employment expectations index dropped to 49.3 points, showing that employers do not expect job growth. The investment intention index slid to 54.6 points, its lowest since October 2023, though still slightly above the historical average of 52.5 points.
The tariffs come amid political tension between the US and Brazil. President Luiz Inácio Lula da Silva rejected former US President Donald Trump’s claim that Brazil is a “horrible trading partner.”
“It is a lie when the US President says Brazil is a bad trading partner. Brazil is good, it just won’t bow down to the US government,” Lula said in Pernambuco.
Trump had criticized Brazil over the trial of former President Jair Bolsonaro, calling it a “political execution.” This has added strain to trade relations.
Economists warn that declining export and investment expectations could slow industrial growth. This may affect jobs, production, and foreign trade balances. The CNI urged policymakers to act quickly to protect the economy from external shocks.
