(Reuters) -Additional U.S. tariffs on Brazil would lead to a steeper slowdown in activity than currently projected for the South American country’s economy, a preliminary assessment by the International Monetary Fund showed.

Some tariffs – for example those on steel and aluminum products – were already affecting the Brazilian economy and had been taken into account for the Fund’s latest forecast, said Petya Koeva-Brooks, Deputy Director at the IMF Research Department. 

“Now, when it comes to the broader question of the impact of further tariffs that had been put forward, our preliminary assessment is that that would lead to a steeper slowdown in activity than we currently are projecting,” said Koeva-Brooks. 

The IMF sees Brazil’s economy growing 2.3% in 2025 from a 3.4% expansion last year.

Products that would be subject to these additional tariffs are expected to make up around 1.1-1.4 percentage points of GDP, she added, speaking during a news briefing at the launch of the update to the Fund’s World Economic Outlook published on Tuesday.

(Reporting by Andrea Shalal and Karin Strohecker, editing by Rodrigo Campos)