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ARX Chief Economist Warns That Current President’s Defense of BRICS Currency Could Cost up to R$ 30 Billion to Brazil’s GDP and Rekindle Trade Dispute with the U.S.
The debate over creating an alternative currency to the dollar within the BRICS has regained momentum and is already generating significant repercussions in the financial market. ARX Investimentos’ chief economist, Gabriel Leal de Barros, issued a strong warning on August 17, 2025 in an interview with the Poder360 portal: “Brazil’s insistence on supporting this proposal could cost the country up to R$ 30 billion in GDP and could also rekindle a trade dispute with the United States.”
According to him, the recent statements made by President Lula in support of a common BRICS currency were interpreted in Washington as a hostile gesture, capable of prompting immediate retaliation from the U.S. government. Possible responses could include tariffs on Brazilian products, non-tariff barriers, and a review of direct investment flows into the country.
The Weight of the U.S. on the Brazilian Economy
The United States is the second-largest trading partner of Brazil, just behind China, and accounts for a significant share of Brazilian exports of high-value goods, such as manufactured products and chemical industry items. Additionally, the U.S. occupies a prominent position in the stock of Foreign Direct Investment (FDI), with billions invested in strategic sectors such as energy, technology, and infrastructure.
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To lose part of this market and capital due to an international political dispute could have devastating impacts.
For Gabriel Leal de Barros, the greater risk is not only in tariffs on exports but also in the psychological effect on investors who, faced with instability, may redirect their investments to other Latin American countries, such as Mexico and Chile.
“The United States remains the world’s largest consumer market and the main reference of stability for investors. Creating friction in the name of a medium-term political agenda could cost Brazil dearly in the short term,” said the economist.
BRICS and the Dollar
The proposal for a common BRICS currency is not new. Since 2023, leaders of the bloc have been discussing ways to reduce dependence on the dollar in international transactions.
In practice, the initiative seeks to protect emerging economies from external shocks and enhance autonomy in global negotiations.
However, experts say that Brazil’s explicit defense of this measure during a politically tense moment with the U.S. has been interpreted as a provocation. Washington, which had already been monitoring the moves of China and Russia within the bloc, now views Brazil’s positioning as a potential strategic realignment.
This scenario fuels the risk of retaliatory measures, especially in a context where the U.S. seeks to protect supply chains and strengthen its geopolitical influence in strategic regions like Latin America.
Estimated Impact: Up to R$ 30 Billion on GDP
The ARX Investimentos calculation is based on a scenario of tariff surcharges imposed by the U.S. on Brazilian products, particularly agricultural commodities and manufactured goods.
If the increases reach levels similar to those seen in previous trade wars, such as the dispute between the U.S. and China in 2018, Brazil’s loss could reach R$ 30 billion annually on GDP.
This amount is not just statistical: it would translate into less investment, a decline in exports, and job losses in sectors that depend on the U.S. market. For instance, in agribusiness alone, the U.S. absorbs about US$ 9 billion annually in Brazilian products, such as steel, cellulose, coffee, and meats. The imposition of barriers in this segment would create a cascading effect throughout the entire production chain.
Brazil’s Strategic Dilemma
For the Brazilian government, the defense of a BRICS currency is seen as a long-term strategy to reinforce sovereignty and diversify partners. However, experts like Gabriel Leal de Barros warn that this stance could bring an immediate high cost.
“Pragmatism needs to take precedence. Brazil cannot afford to lose market and investments now when the world is already experiencing an economic slowdown. The search for alternatives to the dollar may be legitimate, but it should not be done in a way that jeopardizes strategic trade relations,” he emphasized.
Risk of Isolation and Capital Flight
In addition to the tariff impact, there is a risk that international investors may interpret Brazil’s movement as a signal of geopolitical instability. This could reduce the flow of dollars into the country, pressure the exchange rate, and increase credit costs.
In 2024, Brazil received about US$ 62 billion in Foreign Direct Investment, according to the Central Bank. If part of this capital migrates to more predictable markets like Mexico and Colombia, the effects would be felt in job creation, financing of large infrastructure projects, and the national industry’s innovation capacity.
ARX Investimentos’ warning emphasizes that amid the new global landscape, Brazil needs to balance its bets. On one side, the BRICS offer privileged access to China, India, and Russia; on the other, the U.S. remains a central destination for exports and a source of strategic investments.
Como vocês postam algo sem ao menos revisarem o que foi escrito?
Sem retorno! Vamos fortalecer o BRICS… Vamos ganhar pelo lado certo. Os EUA ja se mostraram “parceiros” inconfiáveis, traiçoeiros. Sempre que podem dar um golpe, eles golpeiam. Quanto mais nos tornarmos independentes deles, melhor.
Dane os EUA que se acha