Key Points
- São Paulo Stock Exchange (Ibovespa) closed down 0.36 percent at 176,010 points amid US customs tariff concerns.
- The Office of the United States Trade Representative proposed an additional 25 percent tax on Brazilian imports, citing 'discriminatory' practices.
- The deadline to announce the list of affected products expires on July 15.
- In the foreign exchange market, the American dollar found buyers at 5,077 Brazilian reals.
By the Numbers
São Paulo Stock Exchange's benchmark index Ibovespa ended Wednesday down 0.36 percent due to concerns over the possibility of the US imposing new customs tariffs on Brazilian products. The index closed at 176,010 base points, almost entirely wiping out the roughly half-point gains it had achieved the previous day.
Market traders are awaiting the decision to be made by the Donald Trump administration regarding the proposal by the Office of the United States Trade Representative (USTR) to impose an additional 25 percent tax on Brazilian imports. Washington claims that Brazil has "unfair" and discriminatory trade practices that harm US companies.
The Brazilian government met with US Trade Representative Jamieson Greer a day earlier, conveying that the additional tax is not fair and is not the right path for a bilateral agreement. Amid this uncertainty, sugar and energy company Raízen and petrochemical company Braskem suffered the biggest losses of the day, while Pão de Açúcar supermarket chain shares gained nearly 7 percent in value, making it the top-performing stock.
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Frequently Asked Questions
- Why did the São Paulo Stock Exchange fall?
- Market concerns over the possibility of the US imposing new customs tariffs due to allegations of Brazil's 'unfair' trade practices pressured the exchange.
- What rates of additional customs tariffs is the US proposing?
- The Office of the United States Trade Representative proposed an additional 25 percent tax on Brazilian imports. Additionally, an extra 12.5 percent tax is on the agenda as part of an investigation covering 60 countries over forced labor allegations.
- Which companies were most affected by the customs tariffs?
- Sugar and energy company Raízen shares fell by 6.4 percent and petrochemical company Braskem shares lost 6.1 percent in value, making them the biggest declining stocks of the day.
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