Key Takeaways
- Brazil's trade council has approved a World Trade Organization (WTO) consultation concerning new U.S. tariffs of 50% on Brazilian exports, as confirmed by Vice President Geraldo Alckmin.
- DoubleLine Capital's Jeffrey Gundlach expressed his view that Federal Reserve Chair Jerome Powell should serve out his term.
- Gundlach reiterated his base case expectation for two Federal Reserve rate cuts this year, despite his perception of Powell's recent hawkish stance.
Brazil is escalating its response to new U.S. tariffs, with Vice President Geraldo Alckmin announcing that the country's trade council has approved a consultation with the World Trade Organization (WTO). The move comes as the U.S. imposed 50% tariffs on certain Brazilian exports, which were set to take effect on August 1st. Brazil views these tariffs as "completely inappropriate" given its trade balance with the United States.
The Brazilian government has been actively working to resolve the tariff issue before the August 1st deadline. An interministerial committee was established to address the situation, and Brazil had submitted a confidential negotiation proposal to the U.S. on May 16th, which had not yet received a response before the tariff announcement. Vice President Alckmin emphasized that Brazil's exports to the U.S. grew by 4.8% from January to June, while U.S. exports to Brazil increased by nearly 12% (11.7%) in the same period, making the 50% tariff unjustifiable.
Beyond formal channels, Brazil is also engaging directly with U.S. businesses and major tech companies like Apple, Google, and Amazon to find joint solutions and mitigate economic impacts. Alckmin highlighted Brazil's clean energy resources and infrastructure as attractive for technology investments and data centers, reinforcing the country's position in negotiations.
In the realm of U.S. monetary policy, DoubleLine Capital's Jeffrey Gundlach shared his opinion that Federal Reserve Chair Jerome Powell should serve out his full term. Gundlach's comments come alongside his continued expectation for two Federal Reserve rate cuts this year. He noted that Powell's recent press conference struck him as quite hawkish, a sentiment that contrasts with his own outlook for easing monetary policy.
Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications.