Brazil faced a relatively lower impact on the new tariffs announced by the United States government on April 2, according to Christopher Garman’s analysis, executive director for Eurasia Group Americas. While Brazilian products received a 10%rate, other countries, especially in Asia, suffered from rates between 25%and 49%.
Garman ponders that, although Brazil may seem in relative advantage, caution is needed in stating that the country was a “winner” in this scenario. He points two main reasons for this precaution:
Risk of new tariff measures
The possibility of future tariff measures against Brazil or other South American countries has not been completely discarded. The US government maintains its focus on implementing a policy of
Restrictions on Chinese investments in the region, which can generate friction in relations between Brazil, China and the United States.
Deterioration of political relations
The political relations between Brazil and the United States “could not be worse” in Garman’s words, citing the trial of former President Jair Bolsonaro as a complicating factor.
The analyst points out that the announcement of April 2 represents a break in the global commercial order. The greatest danger, he said, is a possible deeper discouragement of the global economy, a scenario in which “no one earns in relative terms.”
Garman concludes warning that in a world tendering greater fragmentation, high inflation and lower growth, Brazil will also suffer the negative consequences. This new global economic reality has significant challenges for the country, despite the apparent initial benefit with the lowest tariffs.
