VOLVER

1. US government launches investigation Against Brazil and threatens trade sanctions

At the request of President Donald Trump, the United States Trade Representative (USTR) has opened a trade investigation against Brazil. The move comes after the imposition of a 50% tariff on Brazilian exports and targets alleged unfair trade practices. Among the accusations are restrictions on US social media companies, barriers to digital trade, uneven tariff enforcement, and concerns that Brazil’s electronic payment system PIX may be encouraging unfair practices. Additionally, the popular 25 de Março street market is cited for allegedly violating intellectual property rights.

The Brazilian government has not yet issued an official response, but the move raises alarms about potential economic and diplomatic repercussions. The decision also blends political and commercial arguments, referencing a supposed US trade deficit with Brazil, something contradicted by official data, which shows that the US has exported more to Brazil than it has imported since 2009. Beyond direct trade impacts, the action could hinder investments and further strain bilateral cooperation.

G1: Após pedido de Trump, governo dos EUA abre investigação comercial contra o Brasil 
BBC News Brasil: Do Pix ao etanol, as acusações que motivaram investigação comercial do governo Trump contra o Brasil 

2. Market lowers inflation forecast and remains optimistic about 2025 GDP

For the seventh consecutive week, Brazil’s financial market has lowered its inflation forecast. According to the Central Bank’s Boletim Focus, the estimated IPCA (consumer price index) for 2025 has dropped to 5.17%. Although still above the inflation target ceiling of 4.5%, the downward trend indicates growing market confidence in price control. Projections for the following years remain stable, with inflation expected to hit 4.5% in 2026 and 4% in 2027.

GDP forecasts for 2025 remain steady at 2.23%, while the growth estimate for 2026 was revised slightly upward to 1.89%. The exchange rate forecast for the end of the year was also revised downward, with the U.S. dollar expected to close at R$5.65. Meanwhile, the Selic rate, the main tool for controlling inflation, is still projected at 15% per year, with no recent changes. The Central Bank’s Monetary Policy Committee (Copom) has indicated it intends to maintain this level in upcoming meetings, though it has not ruled out further hikes if inflation rises again.

InfoMoney: Boletim Focus: analistas revisam para baixo a inflação pela sétima semana consecutiva 

3. Supreme Court upholds IOF increase but vetoes “risco sacado” clause

Justice Alexandre de Moraes of the Brazilian Supreme Federal Court (STF) upheld President Lula’s decree increasing IOF (Tax on Financial Operations) rates, affirming the Executive Branch’s authority to set such rates by decree. However, the ruling partially limits the government’s request, as Moraes struck down the portion of the decree that changed the taxation of “risco sacado”, a common financial transaction between companies.

In effect since June 11 with retroactive application, the new IOF rate directly affects international travelers. Previously, using international accounts allowed for lower tax payments, but now the rate has been unified: both Brazilian credit cards and foreign accounts are subject to a 3.5% IOF rate.

Folha de S. Paulo: Moraes valida decreto de Lula sobre IOF e derruba apenas tributação de risco sacado 

4. Service sector leads formal job creation in Brazil

According to a study by the National Confederation of Services (CNS), the service sector accounts for 57% of all formal jobs in Brazil, with 31.6 million positions out of the 55.6 million recorded through May. The data highlights the strength of the sector, especially within private non-financial services, which alone account for 15.7 million jobs.

From January to May 2025, private non-financial services generated 682,000 new jobs. Of these, 333,000 were created by companies and 118,000 in services aimed at households, according to Agência Brasil. The figures underscore the sector’s leadership in job creation and its central role in the country’s economic recovery.

BP Money: Serviços respondem por 57% dos empregos formais, diz CNS 

5. Chamber of Deputies advances income tax reform with exemption for earnings up to R$ 5,000

The Special Committee of the Brazilian Chamber of Deputies has approved Bill 1,087/2025, which expands the personal income tax (IRPF) exemption to those earning up to R$ 5,000 per month. The proposed legislation also includes a partial reduction for salaries up to R$ 7,350 and introduces an additional tax rate of up to 10% for annual incomes above R$ 600,000. The bill is expected to be voted on in the Chamber’s plenary in August.

In addition to addressing distortions in income tax collection, the proposal includes a tax on dividends paid to individuals in Brazil (for amounts over R$ 50,000 per company), maintains taxation on international remittances with some exceptions, and excludes certain incentivized financial instruments from the minimum tax base. Supporters argue the measure aims to promote greater tax justice by easing the burden on lower-income groups while increasing contributions from the wealthy.

Agência Brasil: Comissão da Câmara aprova isenção do IR para quem ganha até R$ 5 mil