Brazil negotiates tariffs with the US while the stock market crashes.

Diplomacy and the market in motion

While Brazil attempts to reverse tariffs imposed by the United States, the financial market celebrates record highs. The scenario reveals an economy in transition: vulnerable to external pressures, but resilient in terms of domestic investment.

The diplomatic front

Foreign Minister Mauro Vieira continues direct negotiations with US Secretary of State Marco Rubio. This Thursday (13), the two meet in Washington to discuss trade tariffs affecting Brazilian companies. The objective is clear: to reverse the 40% tariffs imposed by Donald Trump.

The talks are not new. Vieira and Rubio already met on Wednesday (12) in Niagara, during the G7 meeting, where they discussed the progress of bilateral negotiations. Brazil sent a formal proposal to the United States on November 4, after a virtual meeting between the technical teams of the two countries.

Expanded Sovereign Brazil Plan

Recognizing the impact of tariffs, the federal government expanded access to the Sovereign Brazil Plan on Wednesday (12). Ordinance 21, published by the Ministries of Finance and Development, Industry, Trade and Services (MDIC), reduces the minimum impact on exports required for companies to access emergency financing lines from 5% to 1%.

The change is significant: previously, only companies, individual micro-entrepreneurs, and rural producers who could prove an impact exceeding 5% of gross revenue from exports to the United States could apply for the program. Now, the criterion considers companies that have 1% of their export revenue to the US, between July 2024 and June 2025, impacted by tariffs.

Stock market in historic euphoria.

While diplomacy works behind the scenes, the Brazilian stock market continues its upward trajectory. The Ibovespa closed Monday (10) at 155,257 points, with an increase of 0.77%, marking the 14th consecutive rise. The index hit a record for the 11th time in a row and is close to equaling the sequence of 15 increases between May and June 1994, the period before the Real Plan.

On Thursday (13), however, the market showed a correction: the Ibovespa closed with losses of 0.30%, at 157,162.43 points. Financial agents realized profits and reacted to corporate results, including the balance sheet of Banco do Brasil, which cut its forecast for 2025 profit after a 60% drop in profit in the third quarter.

Dollar falling and expectations of lower interest rates

The commercial dollar closed Monday (10) sold at R$ 5.307, with a decline of R$ 0.029 (-0.55%). The currency continues on a downward trajectory: it accumulates a decline of 14.12% in 2025 and fell 1.36% in November alone. On Thursday (13), the December futures dollar contract rose 0.06% on the B3, to R$ 5.3175.

Market expectations are focused on the possibility of a reduction in the Selic rate (basic interest rate of the economy). With the release of the minutes of the Monetary Policy Committee (Copom) on Tuesday (11) and the official inflation figures for October, investors are looking for signs of when the Central Bank should start lowering interest rates. Lower interest rates encourage the migration of investments to the stock market.

Retail at a slow pace

The Brazilian Institute of Geography and Statistics (IBGE) reported that retail sales fell 0.31% in September compared to August, but rose 0.81% compared to September of last year. Reuters' expectation was for a 0.31% increase month-on-month and a 21% increase year-on-year.

Despite this, analysts point out that retail stocks should benefit from Black Friday and the November sales campaigns. Casas Bahia and Mercado Livre stand out in investment portfolios.

The global context

The end of the US government shutdown, after 43 days, brought relief to the markets. Donald Trump signed the law extending US government funding until January 30th. As a result, the food assistance program was resumed, hundreds of thousands of federal employees will receive back pay, and the air traffic control system was normalized.

The resumption of economic data releases by US federal agencies in the coming days will be crucial for calibrating bets on US interest rates, directly affecting emerging markets, including Brazil.

What changes for you?

For exporting companies: the Sovereign Brazil Plan is now more accessible, with a reduced impact criterion in 80%. If your company exports to the USA, check if it qualifies under the new regulation.

For investors: the Brazilian stock market remains attractive, but with expected volatility. The Copom's decision on interest rates will be crucial for future movements.

For consumers: the falling dollar reduces inflationary pressure on imported products. Lower interest rates should stimulate credit and consumption in the coming months.

Photo by Towfiqu barbhuiya on Unsplash