* Trump puts 35% tariff on Canada, EU tariff rate awaited * Peru's central bank holds rate, as expected * Brazil considers retaliation to US tariffs * MSCI Latam FX index set for first weekly decline in six weeks (Updates with afternoon trading levels) By Ragini Mathur, Purvi Agarwal and Shashwat Chauhan July 11 (Reuters) - Most Latin American currencies and stocks fell on Friday and were on track for weekly losses, as U.S. President Donald Trump expanded his global tariff threats, injecting fresh uncertainty into markets. Trump escalated his trade war on Thursday, imposing a 35% tariff on Canadian imports starting August 1 and proposing a blanket tariff rate of 15%-20% on other countries, an increase from the current 10% baseline rate. Investors were also bracing for a possible European Union tariff announcement on the day. Brazil, Latin America's biggest economy, was caught in the crossfire after Trump threatened 50% duties on Brazilian and copper imports to the United States, in a double whammy for the country. The move puts resource-rich Latin American countries, which were spared from high levies in Trump's "Liberation Day" tariffs, in the spotlight. The Brazilian real fell 0.3% on Friday and is poised to mark its first weekly decline in six weeks. President Luiz Inacio Lula da Silva vowed retaliation from August 1, but would be open to diplomacy. "We believe that retaliatory tariffs will be the last resort, not least because an escalation could boost domestic consumer prices at a time when Brazilian inflation is coming increasingly under control," said TS Lombard strategists, in a note led by managing director for Brazil Research Elizabeth Johnson. Separately, the country's finance ministry raised its forecast for economic growth this year, while projecting a slight slowdown in 2026 in light of the central bank's tight monetary policy. Peru's currency was down 0.2% after its local central bank held benchmark interest rate at 4.5% on Thursday for the second time in a row, as analysts had expected. The Chilean peso declined for the third straight day and was also set to end the week lower, while the Mexican peso was down 0.2%. MSCI's Latin American currency index <.MILA00000CUS> was flat on the day but on track to snap a fifth consecutive weekly winning streak. The regional stocks gauge <.MILA00000PUS> was down 0.5%, on track for its biggest weekly decline since late March. Heavyweight Brazilian stocks <.BVSP> slipped 0.4%, while Mexico's shares <.MXX> were down 0.2%. Wall Street brokerage Goldman Sachs raised its year-end target for the MSCI Emerging Markets stock index <.MSCIEF> to 1,370 from its previous forecast of 1,290, as it expects that earnings growth will be the dominant driver of market gains going forward. HIGHLIGHTS ** Peru central bank holds growth forecasts steady as Trump readies copper tariffs ** Argentina inflation seen accelerating in June after May slowdown Key Latin American stock indexes and currencies: MSCI Emerging Markets 1228.86 -0.19 <.MSCIEF> MSCI LatAm 2279.36 -0.50 <.MILA00000PUS> Brazil Bovespa <.BVSP> 136154.93 -0.43 Mexico IPC <.MXX> 56623.31 -0.21 Argentina Merval <.MERV> 2011249.16 -2.78 Chile IPSA <.SPIPSA> 8233.67 -1.32 Colombia COLCAP <.COLCAP> 1688.47 0.32 Brazil real 5.5466 -0.28 Mexico peso 18.64 -0.19 Chile peso 957.7 -0.81 Colombia peso 3999.5 0.25 Peru sol 3.5525 -0.21 Argentina peso 1260 -0.28 (interbank) Argentina peso (parallel) 1280 1.17 (Reporting by Ragini Mathur, Purvi Agarwal Shashwat Chauhan in Bengaluru; Editing by Mohammed Safi Shamsi) ((mailto:Ragini.Mathur@thomsonreuters.com; Shashwat.Chauhan@thomsonreuters.com)) Keywords: EMERGING MARKETS/LATAM (UPDATE 1)
