Everything Brazil exports will be at the level of products used for drug export or terrorist attacks
When a powerful nation labels another country's criminal organizations as terrorist entities, the consequences reach far beyond courtrooms and border checkpoints — they reshape the invisible architecture of trust that holds global commerce together. The United States has applied that designation to several Brazilian criminal factions, and scholars of international relations and economics are warning that the move will wound Brazil's legitimate economy: its investors, its exporters, its tourists, and its innovators. The classification, critics argue, conflates organized crime's hunger for profit with terrorism's hunger for ideology — a distinction that matters enormously, and that Washington appears unwilling to honor.
- Foreign banks and multinationals are already sending security questionnaires to Brazilian academics, signaling a quiet but rapid reassessment of the country as a safe destination for capital and technology.
- Brazilian exports now travel under a cloud of suspicion, with the US and its European allies treating every shipment as potentially entangled in drug trafficking or terrorist activity — a burden that experts call deep and permanent.
- São Paulo and Rio de Janeiro face an immediate collapse in both leisure and business tourism, threatening the hotel, restaurant, and transportation workers who depend on the conferences and trade events that define those cities' economic pulse.
- The terrorism label is feared as a political weapon: it could provide legal cover to target Brazilian fintech firms, including the Pix instant payment system, which has already drawn American scrutiny for undercutting US financial companies.
- Brazilian economists and political scientists are pushing back with a foundational argument — organized crime seeks profit, not ideology, and the US designation misapplies a category designed for groups like the Islamic State, potentially doing nothing to reduce crime while inflicting serious economic harm.
The United States has designated several Brazilian criminal organizations as terrorist entities, and the decision is sending tremors through Brazil's legitimate economy. Francisco Carlos Teixeira da Silva, a political scientist and retired professor at the Federal University of Rio de Janeiro, is already fielding questionnaires from foreign companies asking him to evaluate Brazil's security environment. His answer is sobering: banks and industrial firms will face pressure to reduce their presence, job creation will stall, and the technology transfers that help developing economies modernize will dry up.
The damage extends to trade. Brazilian exports will now face heightened scrutiny from the United States and its European allies, who treat Washington's terrorism designations as their own. Every shipment risks being flagged as potentially connected to criminal or terrorist activity — a shadow Teixeira describes as long and permanent. Tourism will feel the blow immediately. By placing Brazil in a category alongside countries like Somalia, the designation discourages not only leisure travelers but the business visitors whose conferences and trade events sustain São Paulo's hotels, restaurants, and taxi networks.
Luiz Carlos Prado, an international economics professor also at UFRJ, sees a still deeper risk: the classification as a political instrument. Recent investigations have already touched fintech firms in São Paulo's Faria Lima district, and the terrorism label now provides legal and political cover to target Brazilian financial companies — including Pix, Brazil's innovative instant payment platform, which has cost American financial firms business and already drawn US scrutiny for alleged unfair competition.
Both scholars insist on a distinction Washington appears to be ignoring: terrorism pursues ideological objectives, while organized crime pursues profit. Brazilian criminal factions have no ideological support base in Europe, the United States, or Central America — making the designation, in their view, a category error that will punish the Brazilian economy without meaningfully combating crime. Teixeira argues that if the United States genuinely wanted to strike at organized crime, it would scrutinize the financial infrastructure that enables money laundering — including Delaware's tax haven status and the American-sovereign Caribbean islands where Brazilian criminal proceeds are washed clean.
The United States has designated several Brazilian criminal organizations as terrorist entities, and economists and international relations scholars are warning that the move will inflict serious damage on Brazil's economy—damage that extends far beyond the criminal underworld into legitimate business, tourism, and trade.
Francisco Carlos Teixeira da Silva, a political scientist specializing in international relations and a retired professor at the Federal University of Rio de Janeiro, has begun receiving questionnaires from foreign companies asking him to assess Brazil's security environment. The designation, he explains, will reshape how multinational corporations evaluate the country as a place to invest. Banks and industrial firms will face pressure to withdraw or reduce their presence. Job creation will stall. Technology transfers—the kind of knowledge flow that helps developing economies modernize—will dry up. "With the definition of a country that harbors international terrorism, this level of investment will suffer a very large impact," he told the Brazilian News Agency.
The damage will ripple through exports as well. Brazilian goods will now face heightened scrutiny from the United States and its European allies, who accept Washington's terrorism designations as their own. Every shipment becomes suspect. Every product risks being flagged as potentially connected to drug trafficking or terrorist activity. "Everything Brazil exports will be at the level of products that could be used for drug export, for terrorist attacks or against transnational corporations," Teixeira said. "This is the deepest level that will impact Brazilian exports in a long and permanent way."
Tourism will feel the blow immediately. The Trump administration's decision places Brazil in a category alongside countries like Somalia—places that international travelers and business people avoid. São Paulo and Rio de Janeiro, cities that host the criminal organizations now labeled as terrorist, will see fewer visitors. But the damage extends beyond leisure travel. Business tourism—the conferences, trade shows, and corporate events that fill hotel rooms and support restaurants, taxi services, and hospitality workers—will collapse. "The organization of business events in São Paulo should fall enormously," Teixeira noted. "It's what we call business tourism, which is extremely important in São Paulo because it moves the hotel network and restaurant and taxi services."
Luiz Carlos Prado, an international economics professor at UFRJ, cautioned that the full economic impact is difficult to measure, but he sees a deeper risk: the classification could become a political weapon. Recent investigations have touched fintech companies in São Paulo's Faria Lima district. The terrorism designation now creates legal and political cover for the United States to target Brazilian financial firms on terrorism-related grounds. "You can use it politically for that end," Prado said. Brazilian companies could find themselves barred from international markets or facing sanctions based on vague allegations of terrorism connections. The classification shrinks the room for maneuver for Brazilian businesses and the Brazilian state itself, raising political instability and uncertainty.
The Brazilian government has suggested the designation may serve as a pretext for external intervention with serious financial consequences. Officials have pointed to the Pix system—Brazil's innovative instant payment platform—as a potential target. The United States has already investigated Pix for alleged unfair competition; the system has cost American financial companies business. A terrorism designation provides another avenue for pressure.
Both Teixeira and Prado emphasized a crucial distinction that the United States appears to be overlooking: terrorism, by definition, pursues political and ideological objectives, while organized crime pursues profit. The Islamic State had ideological supporters across the Middle East and even within U.S.-allied nations. Brazilian criminal organizations have no such ideological base in Europe, the United States, or Central America. "What might eventually motivate support are economic interests," Prado said. The classification, in other words, does not fit the crime.
Teixeira argued that the designation will do nothing to combat organized crime and suggested the United States should instead target the financial infrastructure that enables money laundering. Delaware, he noted, functions as a tax haven where Brazilian criminals launder proceeds. The Caribbean islands—the Virgin Islands and the Cayman Islands—operate under American sovereignty and serve the same purpose. Those are the places that deserve scrutiny, not the Brazilian economy as a whole.
Citações Notáveis
With the definition of a country that harbors international terrorism, this level of investment will suffer a very large impact. Banks, industries will be impacted, generating disinvestment, cessation of job creation and loss in technology transfers.— Francisco Carlos Teixeira da Silva, political scientist and retired UFRJ professor
Organized crime pursues profit, while terrorism pursues political objectives. Brazilian criminal organizations have no ideological support in Europe, the US, or Central America—only economic interests might motivate support.— Luiz Carlos Prado, international economics professor at UFRJ
A Conversa do Hearth Outra perspectiva sobre a história
Why would the US make this designation if it doesn't actually help fight crime?
That's the question the experts keep circling. The designation fits the crime poorly—organized crime pursues profit, not political change. But it does give the US legal and political tools to pressure Brazilian companies and innovations that compete with American interests.
You mean like Pix?
Exactly. Pix is a real threat to American fintech companies. The designation creates cover for ongoing investigations and potential sanctions that might otherwise look like pure economic retaliation.
So this is about competition, not security?
The experts think it's both, but the security rationale is thin. There's no ideological base for these organizations in the US or Europe. They're criminal enterprises, not terrorist movements. That distinction matters legally and morally.
What happens to ordinary Brazilians?
The pain is immediate and broad. Tourists stop coming. Business conferences move elsewhere. Foreign companies pull back on investment and hiring. Technology stops flowing in. It's not just the criminal economy that shrinks—it's the legitimate one.
Can Brazil do anything about it?
Not much unilaterally. The experts suggest the US should look inward—at Delaware, at Caribbean tax havens under American control—if it's serious about stopping money laundering. But that's unlikely to happen.