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Yahoo
2 days ago
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Exclusive-Brazil to establish tax advisory office in China amid deepening ties
By Marcela Ayres BRASILIA (Reuters) -Brazil will establish a tax advisory office in China, the Brazilian Finance Ministry said, highlighting the strategic importance of the move as the two nations deepen their ties. The decision underscores Brazil's growing focus on its relationship with China, its largest trading partner, as tariffs introduced by U.S. President Donald Trump escalate global tensions. A draft was seen by Reuters of the presidential decree that will create the new post in Beijing, as well as preparatory documents that cite the "growing complexity" of bilateral trade and the need to enhance cooperation on tax and customs matters. The move coincides with mounting trade tensions between the U.S. and Brazil, after Trump linked fresh 50% tariffs on Brazilian imports to the prosecution of his ally and former President Jair Bolsonaro, leaving limited options for Latin America's largest economy to negotiate a deal. Tax advisory offices or attaches play a "strategic role" in international cooperation by exchanging information critical to combating tax and customs violations, the ministry said. They also provide technical guidance on Brazilian legislation to foreign investors and citizens abroad, helping to improve legal certainty and the business environment, it added. While Brazil's trade overtures to the U.S. have gone unanswered so far, relations with China have deepened. Since taking office in 2023, leftist President Luiz Inacio Lula da Silva has met with President Xi Jinping three times. The two countries have also agreed to explore transportation integration, including a proposed bi-oceanic rail corridor linking Brazil to the Chinese-built port of Chancay in Peru. Asked why Brazil is only now establishing a tax office in China - its top trading partner since 2009 - the ministry denied any link to the ongoing trade war. "There is no political motivation," said the ministry, noting that the initiative reflects the importance of bilateral trade and the need for deeper cooperation on tax and customs issues. Brazil currently has four tax and customs attachés abroad - in Washington and Buenos Aires, both set up in 2000, and in Asuncion and Montevideo, established in 2002. The United States remains Brazil's top source of foreign direct investment, while Argentina, Paraguay, and Uruguay are its Mercosur bloc co-founders. The Finance Ministry said discussions around the attaché in Beijing began in 2023 and have involved technical reviews by multiple ministries since January 6 this year. (Reporting and writing by Marcela Ayres; Editing by Manuela Andreoni and David Holmes)
Yahoo
15-07-2025
- Business
- Yahoo
Brazilian pulp giant Suzano sees no short-term impact from US tariff announcement
By Marcela Ayres BRASILIA (Reuters) -Pulp maker Suzano has not seen any impact yet from the U.S. government's announcement that it would impose a 50% tariff on Brazilian goods, but is working on hedging strategies, an executive said on Tuesday. Brazil accounts for roughly 83% of the total hardwood pulp the United States imports in a given year, according to Suzano, one of the world's largest pulp producers. "No impact in the short term," Suzano's managing director for the Americas, Guilherme Miranda, told an event hosted by the Brazilian-American Chamber of Commerce when asked if clients had started pulling back or canceling orders. Miranda added that Suzano had nonetheless been working on building up inventory in the U.S. as a hedging strategy. U.S. President Donald Trump announced last week that he planned to impose 50% tariffs on all products from Brazil starting August 1. Analysts at Citi noted that Suzano, with 15% of its revenues in the U.S., could face difficulties in the short term, but benefits from having low costs, flexibility to reallocate volumes and global scale. Miranda stressed that Suzano could find ways to sell its products to other markets, but that the best possible outcome would be to maintain its long-standing relationship with North American clients. "We have high trust that our government will be engaged in finding a negotiated outcome for tariffs," the executive said. He added that U.S. consumers would ultimately bear the additional costs stemming from tariffs. "Pulp is a commodity, we don't have that margin to subsidize the product," Miranda said. Sao Paulo-traded shares of Suzano were up 0.5% on Tuesday, outperforming benchmark stock index Bovespa, which slipped 0.5%. 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
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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
07-05-2025
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Brazil central bank hikes rates to near 20-year high, leaves next steps open
By Marcela Ayres BRASILIA (Reuters) -Brazil's central bank raised interest rates by 50 basis points on Wednesday in a sixth straight hike that pushed borrowing costs to their highest in nearly 20 years, and left future steps open amid global uncertainties and sticky domestic inflation. The bank's monetary policy committee, known as Copom, raised the Selic to 14.75% in a unanimous decision, matching forecasts from 32 of 35 economists in a Reuters poll. "For the next meeting, the scenario of heightened uncertainty, combined with the advanced stage of the current monetary policy cycle and its cumulative impacts yet to be observed, requires additional caution in the monetary policy action and flexibility to incorporate data that impact the inflation outlook," policymakers said in the statement from the decision. In March, the central bank had already flagged the need for further tightening, though at a slower pace than the previous three 100 basis-point hikes. With Wednesday's move - announced just hours after the U.S. Federal Reserve held rates steady but cited the risk of rising inflation and unemployment - the Selic benchmark rate has now reached its highest level since August 2006. The sky-high rates come against a backdrop of a 5.49% annual inflation rate, well above the official 3% goal, with markets skeptical that inflation will return to target even by as far out as 2028. The aggressive tightening has added 425 basis points to the benchmark rate since September, but policymakers stressed on Wednesday they observe "an incipient moderation in growth," with indicators of domestic economic activity and the labor market still exhibiting strength. Global uncertainties, triggered by sweeping U.S. trade tariffs that have clouded the outlook for the world's largest economy, have led Copom members to emphasize the need for greater caution and flexibility in remarks ahead of the decision. The current environment, they argued, not only limits their ability to provide any guidance but also requires policymakers to consider a broader and diverse set of data to assess whether monetary policy is achieving its intended effects. Their concern about the trajectory of Latin America's largest economy came despite some favorable inflationary developments since the Brazilian central bank's latest policy meeting, including a stronger currency and lower commodity prices. On the other hand, the government of President Luiz Inacio Lula da Silva has unveiled new stimulus measures, such as changes to rules governing payroll-deductible loans, as it struggles to reverse a plunge in the leftist leader's approval ratings.
Yahoo
30-04-2025
- Business
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Brazil considers capping meal voucher fees, Pix system deposits doubtful, say sources
By Marcela Ayres BRASILIA (Reuters) -Brazil's government is considering capping card processor fees and shortening settlement periods to cut intermediation costs in the country's multi-billion-dollar meal voucher market, three sources with knowledge of the government's plans said. The sources, who requested anonymity to discuss private talks, said the idea of transferring funds directly to workers through Brazil's widely popular Pix instant payment system had been discussed but is unlikely to move forward because of strong opposition from restaurant associations and meal voucher companies, which act as intermediaries. The move comes as the government tries to curb food inflation that has weighed on President Luiz Inacio Lula da Silva's approval ratings, though it continues to delay regulations needed to open up the concentrated meal voucher market under rules passed by Congress in 2022. The Labor Ministry did not respond to a request for comment, and the Finance Ministry declined to comment. The Pix alternative had been reported by local outlets last week, sending shares of meal voucher providers Edenred, which owns Ticket, and Pluxee, which owns Sodexo, sharply lower. Alongside privately held Alelo and VR, these companies control roughly 85% of Brazil's meal voucher market. Direct Pix deposits would effectively eliminate the need for intermediaries in a market that moves around 170 billion reais ($30 billion) annually under Brazil's Worker Food Program (PAT), created in 1976 to offer tax incentives to companies covering their employees' meal costs. Speaking to state media on Wednesday, Labor Minister Luiz Marinho also appeared to dismiss the Pix-based alternative. "The program needs to be preserved. Many ideas emerged, and some would have essentially destroyed it. So those were completely ruled out," Marinho said. Without providing details, the minister said there would be changes to fees, which he described as "very high." The sources said the government is considering a cap on the MDR (merchant discount rate) — the fee charged to merchants per transaction. Government estimates seen by Reuters show restaurants pay about 8% more on sales with meal vouchers than with credit cards. Marinho also flagged potential changes to settlement periods, acknowledging controversy over how long it takes for funds to reach restaurants after being paid to the voucher companies. In the public sector, he said, contracts often stipulate 30-day payment terms. "Contracts need to be adjusted to drastically shorten that period," he said. Marinho said the government is weighing the issue carefully and could announce a decision in May, although no formal decree is currently in the works. The Brazilian Chamber of Worker Benefits (CBBT), which represents newer companies, said there is no evidence that changing fees or settlement terms would lower food costs for workers. It instead called for the long-delayed implementation of a 2022 law that opened the rule for a single "interoperable" network for all accredited players. The measure, which is also supported by supermarkets, would enable open access to major voucher networks and end exclusivity in participant access. But Lula's administration has delayed regulations needed to implement the changes, including portability rules that would allow users to transfer meal credits between providers. ($1 = 5.6635 reais) Sign in to access your portfolio
