Brazil faces high interest rates and US tariff threat, says Finance Minister

Finance Minister Dario Durigan said Brazil’s main economic bottleneck is the high Selic rate, now at 14.25%, which depresses investment and pressures public debt. He argued the Ministry of Finance is not responsible for the rate and called for a large fiscal effort and better coordination with the Central Bank to curb inflation.

Durigan also rejected the U.S. Trade Representative’s proposal to impose a 25% tariff on Brazilian products, stating the measure would hurt U.S. companies and undermine bilateral trade. Brazil’s foreign ministry echoed this, noting the tariff would raise costs for American firms and that the digital payment system Pix is open to U.S. providers such as Google Pay and Visa.

President Lula’s team is focusing on technical negotiations with U.S. agencies, aiming to avoid politicisation and prevent the tariff from being applied before the July 15 deadline. Advisors have outlined two scenarios: an immediate 25% tariff or a delayed decision pending Brazil’s October election.