São Paulo (Reuters) – North American protectionism is expected to intensify next year with the new government of Republican president-elect Donald Trump, which could increase Chinese competition in the Brazilian machinery and equipment sector, said the association’s executive president who represents the industry, Abimaq, José Velloso.
“The restrictive policy of the United States is already a problem because China is looking for new markets, including Brazil. With Trump, we believe this will intensify,” the executive told Reuters this Monday, at the entity’s end-of-year event in São Paulo.
In the machinery and equipment sector, from January to October this year, Chinese goods accounted for the largest portion (31%) of imports made by Brazil, growth of 5.2 percentage points compared to the same period in 2023, according to data from Abimaq . In October, 40% of the total imported came from China.
Continues after advertising
Velloso commented that since Trump’s first election, the US has intensified a protectionist policy and intensified its trade war with China, leading the Asian country to seek new markets, including Brazil.
The executive recalled the steel sector’s demands for a higher import tariff for products from China, discussions in the retail sector, mainly textiles, about the Chinese giant Shein, and the automotive industry that now shares the market with electric and hybrid cars. Chinese.
“This will intensify and then the diversion of trade from China to Brazil could increase,” he said, although he said he does not believe that Trump will be “as radical and aggressive” as he has presented himself in speeches and throughout his campaign. to the Presidency.
Continues after advertising
“If the United States isolates itself from Mexico, Canada, Brazil, starts to isolate itself from the world, it will play into China’s hands. He will take these developing countries and throw them into China’s lap,” said Velloso, adding that the USA is Brazil’s largest trading partner in manufactured goods.
He also ruled out that Brazilian economic sectors dependent on Chinese trade, such as agribusiness, accept any “retaliation” against China similar to that promised by Trump.
“And we in the manufacturing industry are caught in the middle of this… It’s a problem that we’re going to have to deal with in the coming months and monitor what the foreign policy of Brazil and Mercosur will be in relation to the increase in imports from China.”
Continues after advertising
Trump, who secured his return to the White House last month, has said he will impose major tariffs on the country’s three largest trading partners — Canada, Mexico and China — and last weekend he said he may tax the Brics member countries. up to 100% if the group does not commit to not creating a common currency for the bloc of emerging countries or not supporting another currency that replaces the dollar.
“I don’t think this will happen, because I think that businesspeople, the sector, the market will not run away from the dollar”, said the executive president of Abimaq. “I think it’s difficult for Brazilian businesspeople to move from the dollar standard to a Brics standard that we don’t yet know what it is.”
