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Trump's tariffs on Brazil exclude some imports

*

Interest rate decision in Brazil awaited

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Mexico's economy grows 0.7% in second quarter

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US imposes 25% tariff on India

(Updates with afternoon levels)

By Ankita Yadav, Purvi Agarwal and Ragini Mathur

July 30 (Reuters) -

Brazilian assets recovered from early losses on Wednesday,

after U.S. President Donald Trump

slapped tariffs

on Latin America's largest economy but excluded a series of

items, in a relief for investors.

Other Latin American currencies were pressured by a jump

in the dollar after the U.S. Federal Reserve left

interest rates unchanged and Chair Jerome Powell issued a

cautious outlook on further monetary policy easing.

The Brazilian real, briefly touched near

two-month high, recovering from a 1% decline earlier in the

session, while stocks gained 1% and the benchmark

10-year bond was marginally higher following the

news on trade.

Brazilian exports to the U.S. now face a total of 50%

tariffs, but items such as orange juice, wood pulp, energy

products and civil aircraft and parts were excluded. Shares of

plane maker Embraer ( ERJ ) jumped 11.4% and wood pulp maker

Suzano rose nearly 1% after the news.

Trump's threats of steeper tariffs on the country

earlier this month tempered a rally in Brazilian assets.

However, analysts have pointed out that the United States enjoys

a trade surplus with Brazil, making the Latin American economy

relatively less exposed to tariff uncertainty.

"Any tariff adjustments or exemptions would be designed

to avoid penalizing products that the U.S. doesn't produce,"

said Rachel Ziemba, founder of Ziemba Insights.

"This would limit the economic hit to Brazil if these

exemptions were put in place. However, at the end of the day,

Brazil still is a fairly closed economy, it is ultimately likely

to be fairly resilient to tariffs."

Focus now will be on a local rate decision where the

Banco Central do Brasil is expected to hold its Selic rate at a

two-decade high of 15%.

"More important than keeping rates unchanged is the

guidance: having told markets that rates would be kept unchanged

for very prolonged period of time," said Dalton Gardimam, chief

economist at Ágora, Banco Bradesco's investment house.

Meanwhile, the Fed's decision pressured other currencies

such as Mexico's peso and Colombia's peso - down

0.6% and 1.1%, respectively.

Trump also announced a 50% tariff on some copper

products that sparked a

selloff

in U.S. futures of the red metal that had rallied in recent

weeks.

Currencies of copper producers in Latin America such as

Chile's peso and Peru's sol were down 1% and 0.5%,

respectively. The chairman of the world's biggest copper

producer, Chile's state-run Codelco, said it was positive that

cathodes were not subject

to U.S. tariffs.

Mexico's peso weakened 0.6%, while local stocks

dropped 1%. Data showed the economy grew 0.7% in the

second quarter, beating expectations.

Other equities in the region such as Argentina and

Colombia were flat to marginally lower.

Earlier, the U.S. announced a 25% tariff on Indian imports

starting on August 1 and also added an extra penalty and Trump

indicated initially it was for India buying Russian arms and oil

and its non-monetary trade barriers.

Before the announcement, India's rupee closed 0.7%

lower. The currency is among the few to have weakened against

the dollar this year, compared to other EM currencies that have

capitalised on the dollar's decline.

The U.S.-listed India ETF fell 1.5%, following the

announcement.

Key Latin American stock indexes and currencies:

Latin American market prices

from Reuters

MSCI Emerging Markets 1249.06 -0.26

MSCI LatAm 2240.67 0.10

Brazil Bovespa 134077.15 1.02

Mexico IPC 57229.97 -1.02

Chile IPSA 8119.05 -0.03

Argentina Merval 2300086.48 -0.185

Colombia COLCAP 1748.81 -0.52

Brazil real 5.5823 -0.15

Mexico peso 18.8515 -0.56

Chile peso 980.63 -1

Colombia peso 4181.18 -1.15

Peru sol 3.5686 -0.52

Argentina peso (interbank) 1315 -1.78

Argentina peso (parallel) 1300 1.52