Latest news with #BernardoCaram
Yahoo
04-08-2025
- Business
- Yahoo
Brazil chooses local relief over retaliation for US tariffs, sources say
By Marcela Ayres, Bernardo Caram and Lisandra Paraguassu BRASILIA (Reuters) -Brazil's government has set aside for now plans for direct retaliation against steep U.S. tariffs taking effect this week, focusing instead on a relief package for industries hit hardest by the levies, sources familiar with the strategy said. Wide-ranging exemptions granted in U.S. President Donald Trump's executive order last week spared some of the most vulnerable sectors of Latin America's largest economy, to the relief of many investors and business leaders. That has left Brasilia cautious about responding to Trump with reciprocal tariffs or other retaliation that could escalate tensions, said government officials, who requested anonymity to discuss confidential deliberations. Talks with Washington are likely to be slow and complex, said one of the sources, so Brazil's government is prioritizing immediate relief for exporters, such as through public credit lines and other support for export finance. Another official said the government is studying potential responses to the tariffs that would affect U.S. companies, but sees them as a last resort if negotiations fail. Those potential countermeasures, now under review, could include suspension of royalty payments for pharmaceutical patents and media copyrights, two sources said. The government had also signaled last year that it was preparing a new tax that could affect big U.S. tech companies, but shelved the plan this year to avoid antagonizing Trump ahead of his April tariff announcement. At the time, Brazil was saddled with a 10% tariff, among the lowest in the world, which many credited to a longstanding U.S. trade surplus with Brazil. Trump then tied a steeper 50% tariff in July to what he called a political "witch hunt" against former President Jair Bolsonaro, a right-wing ally on trial for an alleged coup plot to overturn his 2022 election loss. Brazilian President Luiz Inacio Lula da Silva initially said he would respond under the country's Economic Reciprocity Law, passed by Congress to provide legal grounds for countermeasures against trade sanctions, fueling speculation about retaliation. Talk of reciprocal action has since faded, even as Lula criticizes Trump's rationale for the tariff hike, defending the independence of Brazil's judiciary and insisting any negotiations should remain strictly focused on trade. U.S. tariff exemptions granted last week for Brazil's aviation, energy and mining industries were taken in Brasilia as evidence that patient diplomacy and lobbying by affected U.S. companies seeking relief was the best way to get results in Washington. Brazil also said it plans to file a formal complaint at the World Trade Organization over the tariffs, even though that dispute settlement system has been stalled since the first Trump administration. "You still need to go through the available channels," one Brazilian official said, while acknowledging that a resolution is unlikely under the current state of the WTO. More immediately, the government is fine-tuning measures to shield sectors most hurt by the U.S. tariffs set to take effect on Wednesday, extending financial relief to companies already facing canceled contracts. Officials have said the package will likely include credit lines and possible tweaks to the export credit insurance and export financing mechanisms, according to one of the sources. Finance Minister Fernando Haddad, who said relief measures could begin rolling out this week, on Friday said the government was never committed to retaliating against Washington. "We never used that verb to characterize the actions the Brazilian government will take," he said. "These are actions to protect sovereignty, to protect our industry, our agribusiness, our agriculture," he told reporters. "That word (retaliation) was not present in the president's speech, nor in any minister's." Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-07-2025
- Business
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Exclusive-BRICS to launch guarantee fund to boost investment in member nations, sources say
By Marcela Ayres and Bernardo Caram BRASILIA (Reuters) -The BRICS group of developing nations is set to announce a new guarantee fund backed by the New Development Bank (NDB) to lower financing costs and boost investment, two people familiar with the matter told Reuters. The initiative, modeled on the World Bank's Multilateral Investment Guarantee Agency (MIGA), aims to address global investment shifts amid uncertainty surrounding U.S. economic policy, the sources said on condition of anonymity. Brazilian officials view the fund as the centerpiece of the BRICS financial agenda during the country's rotating presidency. The fund is expected to be mentioned in the joint statement at the BRICS summit in Rio de Janeiro next week, said the sources. Originally formed by Brazil, Russia, India and China, the BRICS group later added South Africa and recently expanded to include other developing nations to increase its influence in global governance. The proposed BRICS Multilateral Guarantee (BMG) mechanism, incubated within the NDB, has received technical approval from member states and awaits final signoff from BRICS finance ministers, considered a formality, one of the sources said. Brazil's Finance Ministry declined to comment on the matter. The initiative will not require additional capital from member countries at this stage. Instead, it aims to channel existing NDB resources to projects in developing nations. No initial funding value has been disclosed, but officials involved in the talks expect each dollar in guarantees provided by the NDB to mobilize between five and ten dollars in private capital for pre-approved projects. "This is a politically significant guarantee instrument. It sends a message that BRICS is alive, working on solutions, strengthening the NDB and responding to today's global needs," one source said. Technical preparations setting up the fund are expected to conclude by the end of this year, paving the way for pilot projects to receive guarantees in 2026. BRICS countries face challenges common to developing nations in attracting large-scale private investment in infrastructure, climate adaptation and sustainable development. Officials argue that guarantees issued by the NDB, whose credit rating is higher than that of most member countries, could help mitigate perceived risks for institutional investors and commercial banks. Sign in to access your portfolio
Yahoo
04-06-2025
- Business
- Yahoo
Brazil plans to cut tax breaks, curb education spending in fiscal package, say sources
By Bernardo Caram and Lisandra Paraguassu BRASILIA (Reuters) -Brazil's government is negotiating a package of fiscal measures with congressional leaders that includes cuts to tax exemptions and limits on the growth of transfers to an education fund, according to sources familiar with the talks. After initially signaling the measures would be unveiled on Tuesday, Finance Minister Fernando Haddad said they would be disclosed only after further discussions with party leaders on Sunday. First reported by local newspaper Valor Economico and confirmed by three government sources who requested anonymity, the package is being prepared as an alternative to the controversial hike in the financial transactions tax (IOF) announced last week, which drew broad backlash from lawmakers and business sectors. The plan focuses heavily on reducing tax benefits, a longstanding target of President Luiz Inacio Lula da Silva's leftist administration, said three sources. His economic team often criticizes the volume of tax exemptions that weaken public revenues, though previous attempts to roll them back have seen limited success in Congress. That includes a payroll tax break for companies, which remains in place without due compensation. One of the sources said the new package includes a proposed constitutional amendment that would establish rules to curb growth in transfers to the Fund for the Development of Basic Education. A similar initiative in last year's fiscal package was watered down by Congress, which blocked efforts to redirect more of the fund's resources to full-time education spending. The new measures aim to create fiscal space for the government to revise the recent IOF tax decree, which increased rates on a range of credit, foreign exchange, and pension transactions.
Yahoo
28-04-2025
- Business
- Yahoo
Brazil's government aims to raise $2 billion in financing with new Eco Invest auction
By Bernardo Caram BRASILIA (Reuters) - The government of President Luiz Inácio Lula da Silva expects to raise $2 billion in financing for sustainable projects through a new auction to be announced on Monday as part of the Eco Invest Brazil program, focusing on initiatives to recover degraded pastures. According to Brazil Treasury Secretary Rogério Ceron, the country has the capacity to implement the world's largest land-restoration program. "It has a huge environmental impact, enormous international appeal, and many people are seeking us. We aim, in the best-case scenario, to recover around 1 million hectares. It's quite aggressive," said Ceron, who spoke to Reuters before the announcement. The new auction is part of the "blended finance" line of the Eco Invest program, which combines public and private capital to reduce financing costs and stimulate sustainable initiatives in the private sector, while also reducing the risk of exposure to exchange rates. The official announcement of the auction will be made on Monday by the ministries of Finance, Agriculture and Environment. A decree to regulate the auction will be published this week, and the deadline for banks to submit proposals will be 45 days. Although the exact value cannot be disclosed in order not to hinder competition among financial institutions, the auction is expected to provide around $1 billion in catalytic capital from the Climate Fund, with a requirement for leverage of at least one and a half times, the secretary said. The financial institutions offering the highest leverage in private capital will win the auction. So if the auction is successful, at least $500 million in private resources will be added to the $1 billion from the Climate Fund, a total that can increase depending on the competition. Ceron believes there is an appetite for leveraging that would allow financing to include $1 billion in public capital and $1 billion in private resources. According to the Treasury secretary, at least 60% of the leveraged capital will have to come from foreign fundraising, with the remaining 40% possibly coming from domestic resources. The new auction is part of the government's ecological transformation plan and can boost the National Program for the Conversion of Degraded Pastures, which was launched in 2023 with a focus on recovering lands with low productivity, and expanding food production areas without increasing deforestation. Sign in to access your portfolio
Yahoo
18-02-2025
- Business
- Yahoo
Brazil's government split over multi-billion dollar nuclear plant completion
By Marcela Ayres and Bernardo Caram BRASILIA (Reuters) - Brazil's government is divided over whether to complete its third nuclear power plant after 40 years of off-and-on construction, as the country's economic team pushes for the project to be abandoned, two sources familiar with the matter told Reuters. The final decision over the plant, called Angra 3, rests with the National Energy Policy Council (CNPE), which postponed its decision on the matter again on Tuesday, following another delay late last year. See for yourself — The Yodel is the go-to source for daily news, entertainment and feel-good stories. By signing up, you agree to our Terms and Privacy Policy. According to the Minister of Mines and Energy Alexandre Silveira, the issue is expected to be discussed at the next CNPE meeting, for which no date has been set yet. Construction of the plant, located in the coastal town of Angra dos Reis, began in the 1980s but has faced multiple stoppages due to funding shortages and a 2015 corruption probe. A 2022 attempt to revive the project faltered. The debate comes as President Luiz Inacio Lula da Silva aims to position Latin America's largest economy as a hub for green investment. In recent years, several countries have reconsidered nuclear energy in response to increasing demand for climate-friendly power. Some argue that supporting nuclear energy undermines Brazil's natural advantages in renewable sources such as wind, solar and hydropower. But many experts consider nuclear a good alternative to thermal power, which is more expensive and polluting but often relied upon during droughts. Both have similar costs. "This is a tough battle," said one economic team source, speaking on condition of anonymity due to the private nature of the discussions. "The main argument against it is the lack of funding. Who will cut their budget to make room for this?" Energy Minister Silveira is a major supporter of the project. "We have to complete it," he said in November, calling Angra 3 a "mausoleum." The Finance and Planning Ministries declined to comment. HIGH COSTS A study by state development bank BNDES estimated that completing the plant would require 23 billion reais ($4 billion) on top of the 12 billion reais already spent. Eletronuclear, the state-controlled company overseeing the project, said five more years of construction are needed, plus time for bidding and site mobilization. Alternatively, BNDES estimated that scrapping the project would incur in 21 billion reais of costs, including contract terminations and penalties for canceling subsidized financing. But one source said the Finance Ministry has modeled scenarios where total costs could reach 30 billion reais, and warned that electricity from the plant could drive up power bills. Eletronuclear President Raul Lycurgo Leite, an advocate for the plant, told Reuters that his team plans to raise most of the required funds from the market. "The worst infrastructure project is one that remains stalled," he said, noting that maintaining the unfinished Angra 3 site costs over 1 billion reais annually. ($1 = 5.7104 reais)
