The Brazilian real is struggling to sustain its mid-2024 highs after hitting 5.12 per US dollar on February 23rd, due to a reversal in domestic inflation and renewed global trade instability following the February 20th US Supreme Court ruling on IEEPA tariffs. While the currency initially rose on a massive real-yield spread with the Selic rate at 15%, confidence fractured after mid-month inflation jumped 0.8% against a 0.6% forecast in mid-February. This spike, the steepest in a year, forced a hawkish shift by reducing the chance of a 50-basis-point cut on March 18th. Pressure was intensified by the US administration pivot to Section 122 surcharges, which launched a 10% global import tax on February 24, threatening Brazil’s 17.4% export momentum. Although record tax revenue of R$2.89 trillion and a $4.34 billion January trade surplus provide a cushion, the real is squeezed as the central bank easing cycle clashes with sticky 4.1% annual inflation and shifting trade laws.