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Market Reacts To Decision To Tax Brazilian Products By 50%; The Increase In The Dollar Has Led The Currency To R$ 5.61, And Ibovespa Operates In Decline With Embraer Stocks Plummeting.
The Brazilian financial market reacted with strong instability after the decision by American President Donald Trump to impose a 50% tariff on products sold by Brazil to the United States, effective August 1. The news triggered a sharp increase in the dollar against the real and a widespread decline in the stock market, with aircraft manufacturer Embraer being one of the most affected companies.
The immediate reaction from investors is a anticipation of the effects that the measure may cause in the economy. The expectation of decreased dollar inflow into the country puts upward pressure on the currency’s exchange rate, while the prospect of losses for exporting companies depresses the value of their stocks.
Dollar Volatility On The Day
The day began with a strong increase in the dollar. At 9:11 AM, just 11 minutes after the currency exchange market opened, the commercial dollar, used as a reference for transactions between companies, recorded a rise of 2.08%, being sold at R$ 5.6183. The previous day, the currency had closed at R$ 5.503.
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However, throughout the morning, the exchange rate lost strength. Around 10:37 AM, the increase was 0.59%, with the dollar quoted at R$ 5.537. The tourism dollar, used for travel, also increased by 1.74%, to R$ 5.79. The rush of companies to buy the currency and protect themselves from future increases explains the volatility.
Ibovespa Falls And The Direct Impact On Embraer
The Brazilian stock market, Ibovespa, also felt the negative impact of the news. At 10:15 AM, the main index of the stock market declined by 0.86%, operating at 136,292 points. Most stocks recorded a drop, with the exception of some steelmakers, such as Vale and Gerdau, which rose nearly 3%.
The negative highlight was the actions of Embraer (EMBR3). In the first minutes of trading, the aircraft manufacturer’s shares already recorded a fall of 7.58%, priced at R$ 72.28 around 10:40 AM.
Why Embraer Was The Most Affected By Trump’s Tariff?
Embraer is one of the Brazilian companies most exposed to the North American market. About 60% of the company’s revenue comes from sales to the United States. Since its production is entirely carried out in Brazil, the new 50% tariff on its products directly impacts its competitiveness and profitability.
“Embraer will have a significant impact, as production is entirely in Brazil”, says Marcelo Bolzan, financial planner and partner at The Hill Capital. The consulting firm XP Investments estimates that the manufacturer’s net profit may face a decline of 11% in 2026 due to the increase in expenses generated by the tariff. Despite the blow, the company’s shares accumulated a rise of 48.74% in the first half of 2025, following a growth of 150.96% in 2024.
The General Situation Of The Market And Points Of Attention
In addition to the increase in the dollar and the stock market decline, the financial market is also reflecting on other internal factors, such as the June IPCA data and the statements from the Minister of Finance, Fernando Haddad.
Trump’s decision adds an extra layer of uncertainty to the Brazilian economy, and investors will remain attentive to the developments of the new trade policy of the United States and its effects on Brazilian exporting companies.
How do you think this new tariff may impact the Brazilian economy in the coming months?
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