Recent changes in US commercial policies increase existing vulnerabilities in Latin America, while offering strategic opportunities for certain sectors and emitters in the region. The evaluation is from Moody’s, in a report published on Wednesday, 25.
According to the risk classification agency, agribusiness is one of the sectors that should gain from the tariff war between the United States and China. “US tariffs create new opportunities for Latin American agribusiness, especially with increased Chinese demand for beef, pork and birds,” the report said.
In the Latin American mining and steel industry, Moody’s believes they face high risks in the face of changes in trade and global economic growth. “Iron ore and metallurgical coal, used in steel production, are particularly vulnerable, given the strong dependence on Chinese demand. Tariffs increase the risk of falling demand for basic metals such as copper, pressing global prices.”
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According to the report, especially in Brazil, the redirection of commercial flows can raise steel imports, intensifying pressure on domestic prices and affecting the profitability of companies such as CSN and Usiminas, while Gerdau benefits from their production in the United States.
In chemicals, paper and pulp, according to Moody’s, Latin American manufacturers face excess supply, driven by the expansion of China’s productive capacity.
“Petrochemical spreads remain weak, with a new offer of polyethylene and polypropylene from China and the US,” the agency says. “In the paper and pulp sector, Brazil and Chile are exposed to the volatility of raw material prices. China, which represents 40% of the global demand for short fiber cellulose, remains the main destination for Latin American exports. Brazilian companies such as Suzano and Eldorado Brasil Cellulose maintain competitive advantage with lower production costs.”
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For the agency, Latin American oil and gas producers also face higher risks in a well-stocked market by mid-2026. Falling prices and increased global production reduces the sector’s gains, Moody’s. “In Brazil, Petrobras maintains low extraction costs and can adjust extraordinary dividends to preserve cash generation, even in the face of a broader investment program.”
Already the sectors most focused on the domestic market, such as telecommunications and airlines, are more sensitive to local macroeconomic conditions than to tariffs, according to the agency.
“The Latin American banking system, except Mexico, has direct direct exposure to the most vulnerable sectors. However, increased inflation, interest rates and economic deceleration raise the risks to asset quality and bank profitability,” the agency says. “In Brazil, banks keep business relatively limited with exporters, which reduces their direct exposure.”
