US-China trade war: tariffs on Brazil

What happened: The U.S. imposed a 25% tariff on most Brazilian goods, effective next week, following a yearlong investigation into 'unfair trade practices'. This decision, under Section 301 of the Trade Act of 1974, reignites tensions between the U.S. and Brazil. Meanwhile, German tech giant Bosch agreed to pay $36 million to U.S. authorities for shipping over $70 million worth of sensor products and software to Huawei, which is on a U.S. trade blacklist.

Market impact: Brazilian exports to the U.S., valued at $74.6 billion in 2020, will face increased costs, potentially impacting Brazilian companies and U.S. importers. The U.S. trade surplus with Brazil, at $26.5 billion in 2020, could narrow. Bosch's settlement may signal increased scrutiny of European companies doing business with Huawei, potentially impacting their operations and stock prices.

What to watch next: Brazil's response to the tariffs, including potential retaliation, and the U.S.-Brazil trade negotiations' progress. Additionally, monitor U.S. regulatory actions against Huawei and their impact on European companies, with Bosch's earnings report on July 28 as a key indicator.