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1. Brazilian pulp exempt from US surcharge

The White House has issued an executive order removing the 10% surcharge on pulp exported from Brazil to the United States. The measure was signed by President Donald Trump and published in the Federal Register. This represents a significant change from the tariff policy announced in July, when pulp was included among the goods subject to the surcharge.

The pulp sector is strategic for Brazil, a global leader in product exports, with the US as one of its main buyers. The impact of the tariff had already been felt in Brazilian trade. In May, pulp was the second most affected product among the country’s main exports to the US, with a 35% drop compared to the same period of the previous year.

Poder 360: EUA suspendem sobretaxa de 10% sobre celulose do Brasil

2. Inflation records first decline since August 2024

Brazil’s official inflation gauge, the Broad National Consumer Price Index (IPCA), ended August with a decrease of 0.11%, marking a slowdown compared to July. According to data released by the Brazilian Institute of Geography and Statistics (IBGE), this was the first instance of deflation —prices adjusted downward — since August 2024.

The result came slightly above market expectations, which had forecast a 0.15% drop for the month. In practice, negative inflation brings some relief to household budgets. Even so, the cumulative IPCA rate remains above the ceiling of the target set by the National Monetary Council (CMN).

Exame: IPCA desacelera em agosto e cai 0,11%, primeira deflação em um ano
UOL: Deflação traz alívio momentâneo, mas ameaça economia no longo prazo

3. Agricultural output declines for the second consecutive year

Brazil’s agricultural production totaled R$ 783.2 billion in 2024, a 3.9% drop compared to the previous year, according to the Brazilian Institute of Geography and Statistics (IBGE). This marks the second straight year of decline, following a 2.3% contraction in 2023. The result was driven by unfavorable weather conditions and falling international prices.

Soybeans and corn were the main contributors to the decrease in production value. Soy output fell 5%, while corn dropped 12.9%, both also impacted by depreciation in the external market. Since a large share of the harvest is geared toward exports, lower international prices further worsened the sector’s revenue losses. Coffee is also seeing a drop in output and facing challenges to close the year on a stronger note.

Agência Brasil: Valor da produção agrícola brasileira recua 3,9% em 2024, mostra IBGE
Exame: Produção de café cai no Brasil e IBGE prevê desafios na safra de 2025

4. Retail sales slow down

Brazilian retail sales fell 0.3% in July compared to June, marking the fourth consecutive decline, according to the Brazilian Institute of Geography and Statistics (IBGE). On an annual basis, sales rose 1%, in line with market expectations. The result reinforces signs of an economic slowdown at the start of the third quarter, weighed down by high interest rates.

Of the eight categories surveyed, half registered declines, with the sharpest drops in office equipment, computers, and communication (-3.1%), and textiles, apparel, and footwear (-2.9%). In the broader retail measure, which includes vehicles and construction materials, sales rose 1.3% from the previous month but fell 2.5% year-on-year. According to an IBGE representative, Brazilian retail has shown a slow and steady downward trend in recent months.

Investing News: Vendas no varejo do Brasil recuam 0,3% em julho, em linha com o esperado

5. COP: Finance Ministry proposes integration of carbon markets

Brazil’s Finance Ministry is preparing, as its main proposal for COP30 in Belém, the creation of a coalition of countries to integrate carbon markets. The alliance would operate under a shared emissions cap, which would be progressively reduced to drive the decarbonization of economies. This is one of the Brazilian government’s key bets for the conference.

The coalition model includes fairness criteria for poorer countries and permanent financing mechanisms for climate adaptation. The proposal has been under discussion with the European Union, China, and other interested countries. In an interview with Valor Econômico, a ministry representative emphasized the proposal’s effectiveness, particularly because it does not rely on full consensus to be implemented.

Valor Econômico: Ministério da Fazenda propõe coalizão entre países para mercado de carbono