* LatAm stocks up 2%, FX up 0.3%

* U.S. tariffs on Brazilian exports take effect

* Vale posts largest second-quarter iron ore output since

2018

* Argentina economic activity grows less than expected in

May

* Bolivia days away from announcing deal with IMF, minister

says

(Updates with afternoon trading levels)

By Johann M Cherian, Utkarsh Hathi and Avinash P

July 22 (Reuters) - Most stocks in resource-rich Latin

America rose on Wednesday, tracking higher prices of crude oil

and precious metals as the conflict in the Middle East continued

to escalate.

The spotlight was on Brazil, the region's largest economy,

as investors weighed the fallout of a 25% U.S. tariff on the

country's exports.

The new tariffs are likely to hit roughly 18% to 26% of

Brazil's exports to the United States, according to estimates

from Brazil's government and the National Confederation of

Industry.

The country is also part of a separate U.S. investigation

into forced labor allegations that ends on July 24, which could

add another 12.5% levy.

"We're hoping that the higher commodity prices and oil could

offset any of the tariff worries. But that is definitely a

pressure on the Brazilian economy," said Michael Dehal, senior

portfolio manager at Dehal Investment Partners of Raymond

James."

The country is a crude oil exporter and on Wednesday the

real strengthened 0.4% as Brent crude prices rose

about 3.6% to a six-week high of around $95 a barrel.

Brazilian equities gained 2.4%, with Vale

the biggest boost to the index, rising 3.9% after reporting its

largest second-quarter iron ore output since 2018.

Energy company Petrobras also gained 2%. Other

regional energy companies such as Argentina's YPF

rose 2.5% and U.S.-listed shares of Colombia's Ecopetrol

climbed 1.5%.

The currency of energy exporter Colombia also edged

up 0.3%, taking its yearly gains to 14.9%, most among regional

peers as hopes of business-friendly policies from the incoming

right-wing government lifted sentiment.

Currencies in the region were mixed even as a muted dollar

lifted prices of precious metals such as gold, silver and

platinum, among major exports from the region.

MSCI's Latin American equity index rose 2%,

while the region's currencies inched up 0.3%

versus the U.S. dollar.

In Mexico, investors closely eyed the North American trade

negotiations.

U.S. Trade Representative Jamieson Greer said he hoped to

strike some interim trade agreements with Mexico and Canada this

year while tackling tougher parts of the U.S.-Mexico-Canada

Agreement such as stricter rules of origin in 2027.

"Uncertainty surrounding the USMCA and weak business

investment are likely to continue weighing on confidence," said

Andres Abadia, chief LatAm economist at Pantheon Macroeconomics.

The Mexican peso was muted. Chile's peso

depreciated 0.1%, taking yearly declines so far this year to

nearly 4%.

Argentina's economic activity climbed 0.2% in May compared

with the same month a year earlier, data from Argentina's

national statistics agency showed. Local stocks gained

3.2%, while the peso dipped 0.3%.

Bolivia's international bond maturing in 2031

, traded near 102 cents on the dollar after the

country's economy minister said it was days away from announcing

an agreement with the International Monetary Fund for $2.5

billion to $2.8 billion in financing.

Key Latin American stock indexes and currencies:

Latin American market

prices from Reuters

Equities Latest Daily %

change

MSCI Emerging Markets 1653.65 0.02

MSCI LatAm 3089.59 2.01

Brazil Bovespa 177463.31 2.39

Mexico IPC 67223.64 0.76

Chile IPSA 11002.73 0.44

Argentina Merval 3388298.4 3.239

7

Colombia COLCAP 2310.04 0.38

Currencies Latest Daily %

change

Brazil real 5.053 0.38

Mexico peso 17.407 -0.05

Chile peso 934.99 -0.07

Colombia peso 3205 0.3

Peru sol 3.396 -0.05

Argentina peso (interbank) 1482 -0.27

Argentina peso (parallel) 1535 0.65