The escalating trade dispute between the United States and China has prompted the Asian country to turn to Brazil for goods like soy, corn, poultry and pork, increasing the South American nation’s agricultural exports. Moreover, Brazilian steel exports to the United States nearly tripled in June, compared to the same period last year, after the Trump administration slapped a 25 percent steel tariff on other trade partners but not Brazil, which instead agreed to limit its exports of the metal.
While the Asian nation is targeting a slew of American farm goods in this round of taxes, soybeans are the top agricultural commodity the country imports from the U.S. by far. The oilseed, used to make cooking oil and animal feed, accounts for about 60 percent of the U.S.’s $20 billion of agricultural exports to China. If China retaliates with 25 percent tariffs, American shipments may drop by at least $4.5 billion, according to a study by the University of Tennessee. Brazil, already the world’s biggest soybean shipper, is set to be the biggest winner, filling the gap left by the U.S.
Despite uncertainty surrounding the future of the North American Free Trade Agreement (NAFTA) and the July presidential elections, Mexico now tops FDI confidence in Latin America, according to the latest FDI Confidence Index from A.T. Kearney.
While Argentina’s government continues to struggle with inflation, three Latin American countries that use the dollar as their legal tender are among the winners in terms of keeping consumer price rises in check.
Latin America’s financial technology (fintech) market is growing and companies like Germany-based Mambu are seeking a piece of the action.
Mambu is mainly targeting Brazil and Mexico, followed by Colombia and Argentina and to some extent Chile.
“There’s a lot of appetite for fintechs – there’s a positive wave of new technologies,” says Edgardo Torres-Caballero, Miami-based Managing Director for the Americas at Mambu.
The advantage companies like Mambu offer is that they can help a bank launch a greenfield digital operation in six months or less, Torres says.
In addition to big investments going into the sector, many of Mambu clients are going through first and second rounds of investments.
According to Statista, there will be more than $100 billion in fintech transactions this year in three Latin American markets alone -- Brazil, Mexico and Argentina.
Latin America accounts for a majority of fintech startups that were established between 2014 and 2016, according to data quoted by the Inter-American Development Bank (IDB).
There are more than 700 startups, both local- and foreign financed, with $186 million in venture capital investment, as of 2016, IDB says.
Of those 85 are foreign companies, according to Finnovista.
“Mexico, Brazil and Colombia position themselves as the main Latin American destinations for foreign Fintech startups mainly from Europe and the United States,” it says. “The segments of Payments and Remittances, Lending, Scoring, Identity and Fraud and Enterprise Technologies for Financial Institutions lead the offer of foreign Fintech in the region.”
For decades, many Latin America’s oil-producing nations have often shunned investment from foreign firms, instead keeping their vast reserves under the tight control of governments and state-run oil companies.
They aimed to protect profits to feed public budgets, but in practice have seen some major breakdowns, as with the corruption scandals and heavy debts at Brazil’s Petroleo Brasileiro SA [PDVSA.UL], or the inability of Mexico’s Pemex[PEMX.UL] to conjure the cash and expertise to tap its vast deepwater reserves.
Now, an unprecedented wave of free-market energy reforms is gaining traction across the region, setting up a fierce competition to attract billions of dollars in investment from the likes of Exxon Mobil (XOM.N), BP (BP.L) and Royal Dutch Shell (RDSa.L).
Seven governments this year will combine to hold at least 15 oil and gas auctions, offering a record 1,100 blocks of onshore or offshore acreage, according to interviews with officials and a tally of announced auctions. On Thursday, Brazil’s latest auction collected $2.4 billion in pledges, awarding 22 of 68 regions on offer.