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Brazil is well-placed to climate a commerce struggle as a high exporter of important commodities with sturdy hyperlinks to the world’s massive three financial blocs, mentioned finance minister Fernando Haddad.
“Brazil is in a privileged situation,” he instructed the Monetary Instances in an interview forward of a visit to Europe. Haddad mentioned he had excessive hopes for a free commerce deal agreed between the EU and South American international locations, whereas additionally boasting of an “excellent bilateral relationship” with China and calling the US “a historic partner”.
Haddad, a former educational and longtime ally of veteran leftwing President Luiz Inácio Lula da Silva, was chosen to supervise Latin America’s largest economic system when Lula returned to energy in 2023.
There was “no way”, he mentioned, that Brazil would choose a aspect between China and the US, its first and second-largest buying and selling companions.
However it could additionally goal to open to new markets, he mentioned, noting that Lula “worked very hard personally” to seal the Mercosur commerce grouping’s blockbuster cope with Europe, which was signed in December after greater than 20 years of negotiation however remains to be awaiting ratification.
The accord between the EU and the Mercosur bloc — which contains Argentina, Bolivia, Brazil, Paraguay and Uruguay — eliminates tariffs on 90 per cent of bilateral commerce, however should overcome resistance from some EU member states, together with France and Poland.
“I really believe its time has come, as I believe that Europe realises it also has no other path,” Haddad mentioned. “This is not about moving away from China, from the United States . . . but we have to create new spaces.”
Brazil is likely one of the world’s high meals exporters, and Haddad underlined the rising significance of its processing business. “Brazil is no longer just the granary of the world. Brazil is transforming itself in part into a kind of supermarket of the world,” he mentioned.

The White Home has named Brazil amongst nations charging excessive duties on US merchandise, but it surely has not but been hit with focused measures and President Donald Trump has barely talked about the nation since taking workplace for the second time.
Lula has been cautious to keep away from open battle with Washington, although he vowed to complain to the World Commerce Group about Trump’s 25 per cent tariff on all metal imports.
Trump is trying to reverse US commerce deficits with different international locations, however Haddad identified Brazil is likely one of the few main economies with whom Washington enjoys a surplus in items, which hit $7.4bn in 2024.
He additionally insisted Brazil’s efficient import duties on US wares have been far decrease than headline figures due to exemptions for particular merchandise.
Haddad arrives in France on Monday and was optimistic about Brazil’s commerce relations with its companions on the continent. “Especially since recent episodes that suggest Europe is back in the game and will try to react to being walled in by cultivating multilateralism,” he mentioned.

At house, Haddad has overseen stronger-than-forecast GDP progress, low unemployment and a historic reform to simplify Brazil’s notoriously complicated tax system. However he’s underneath strain from the enterprise class over the delicate public funds and from leftwing members of his personal celebration, who resist spending cuts.
Investor issues over the excessive nominal price range deficit — operating at 8 per cent of GDP within the yr to January — and debt triggered a fall in Brazil’s foreign money in 2024, whereas Lula’s recognition has been damage by inflation which is overshooting a goal ceiling of 4.5 per cent.
Critics say extreme authorities spending is complicating the duty of the central financial institution, which has raised rates of interest to 14.25 per cent.

Haddad mentioned the monetary sector had been excessively pessimistic since Lula’s election victory. Some asset managers who guess towards the federal government had “lost money,” he mentioned. “They’re upset the government worked out.”
He insisted he had been robust on spending, chopping R$35bn ($6.1bn) from the price range final yr, and mentioned the federal government was persevering with to straighten out public funds. IMF forecasts, nevertheless, present Brazil’s gross authorities debt rising from 87.6 per cent of GDP final yr to 97.6 per cent in 2029.
Requested whether or not the federal government had the fiscal deficit underneath management, he replied that this was a query which made no sense. “The finance minister is like a guy in a Formula 1 cockpit in the middle of a race . . . you don’t call him and ask whether everything is under control.”
“I think we have a good team, a good car and, who knows, maybe even a good driver.”
Knowledge visualisation by Keith Fray