Trump–Lula Talks Fuel Brazil Tariff Relief Hopes — This ETF Stands To Gain

The iShares MSCI Brazil ETF (NYSE:EWZ) is back on investor watch lists after President Donald Trump announced on Truth Social that he had a “very productive” call with Brazilian President Luiz Inacio Lula da Silva. With the two leaders discussing a variety of issues, the market is reading the moment as a potential turning point in one of 2025’s more volatile emerging-market stories.

• EWZ ETF has quietly powered through the volatility this year. Check its live prices here.

“We had a very productive call with President Lula of Brazil. Among the things discussed were Trade, how our Countries could work together to stop Organized Crime, Sanctions imposed on various Brazilian dignitaries, Tariffs, and various other items. President Lula and I established a relationship at a meeting which took place at the United Nations, and I believe it set the stage for very good dialogue and agreement long into the future. …,” posted Trump.

Why It Matters

EWZ has spent most of the year slogging through a cocktail of U.S. tariffs, Brazilian fiscal jitters, and a Brazilian Real that occasionally forgets how to behave. Even the hint of diplomatic warmth between Washington and Brasília should be enough to stir sentiment.

The ETF’s largest holdings, Petrobras, Vale, and Itaú Unibanco, are precisely the ones that stand to gain in a cool-down of trade tensions. Commodity exporters especially would welcome any rollback of tariffs that have dented margins and complicated supply chains; a steadier real would be a bonus, giving EWZ an extra lift when translated into U.S. dollars.

Bullish Undercurrents

• Tariff relief expectations could help re-rate depressed Brazilian equities, tempting momentum traders back into the mix.
• Export-levered sectors may witness a sharp sentiment turnaround the moment incremental policy progress is announced.
• Currency stabilization can turbocharge the near-term returns for US-listed Brazilian exposure.

Lingering Risks

• Such diplomatic “honeymoon phases” are historically prone to abrupt endings, and, without policy substance, markets might quickly retrace. Maybe this is the reason, despite Vale shares rising more than 3% on Wednesday, Petrobras and Itaú investors are treading cautiously so far.
• The domestic political and fiscal uncertainties of Brazil haven’t magically vanished.
• Global risk appetite remains fragile, and any bilateral thaw could be overshadowed by weaker commodities or a macro shock.

Bottom Line

For now, let’s treat the Trump–Lula call as the first spark of a potentially friendlier U.S.–Brazil chapter. Whether it becomes a full-blown policy shift is unclear — but EWZ is set to enjoy the glow of being in the spotlight.

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