The increase in promises to change the feature of the planet’s productive and geopolitical chains. The announcement this week, as part of an American strategy of reciprocity and defense of the domestic industry, brings ruptures to the dynamics of commerce and the global economy.
My generation experienced the consistent expansion of international trade, with integration of global chains. Since then, total exports on global GDP has jumped from 12% to 30%, and trade flows have grown 38 times. With the creation of the General Agreement of Tariffs and Commerce (Gatt) in 1947, barriers were reduced and several commercial treaties were created. In 1995, Gatt was replaced by, and a striking event was at the entity in 2001, which brought speed to the process.
The world watched the average growth of 3.3%between 1985 and 2008, with less volatility, low inflation and inclusion of millions of people in labor and consumer markets. The planet left, reduced the number of geopolitical conflicts and saw new liberal democracies consolidate.
The rates announced on Wednesday (2) heavily affected Asia and Europe (10%and 54%tariffs), with Latin America, relatively, less impacted (10%tariffs). The US, besides China, is the main destination of Brazilian exports, accounting for about 12% of the total sent abroad and maintaining a virtually balanced bilateral trade balance. With the new fare, national products will lose competitiveness, predictably resulting in falling exports and. Preliminary estimates point to losses between $ 2 billion and $ 4 billion.
O and its derivatives, main items of the export agenda, remained exempt from tariffs. But, according to the most important product, they rose to 25% in early March. For other items, minimum rates of 10%. The highest added industries, such as aerospace, may feel impact, as the US is its largest foreign market (54%). The, like coffee, can be redirected to other markets, but there will probably be margin losses.
With less dollar entry, the real tends to depreciation, and this makes imported products more expensive, feeding inflation. In a scenario still marked by high interest rates in the central countries, the combination of gear and high price makes it difficult to loosen monetary policy, and may inhibit domestic investments and raise the cost of capital. In addition, the episode affects the perception of risk by international investors, especially if there are questions about Brazil’s institutional response capacity.
In the diplomatic field, it is essential to trigger appropriate channels – – to question the measure, seeking reversal or compensation. In parallel, it would be urgent to accelerate the diversification of markets and exportable products, reducing to.
Reforms are also gaining importance to strengthen competitiveness without resorting to subsidies, which would further press public accounts and interest rates. The most agile return of tax credits, which should already occur in the scope of the customs reckling, the modernization of ports and improvement of are high impact measures that do not imply revenue waiver. Similarly, advances in structuring – tributary, administrative and regulatory reforms – may contribute to increasing systemic efficiency and reducing “Brazil cost” by mitigating the effects of external barriers. Brazil needs to strengthen its defenses for the global protectionist inflection, mainly through retaliation of the hardest affected nations.
Systemic risk is in a moment of slowdown in the world economy. Net exporting countries such as Brazil, India and Germany may suffer simultaneous losses of external demand. In addition, the unpredictability generated by unilateral measures increases risk aversion and delays investment decisions. The setback in commercial opening compromises productivity and long -term growth.
More US tariffs are therefore a test to Brazil’s external resilience. By signaling measures to reinforce the competitiveness of their companies – time to isolate themselves – the country can turn this challenge into opportunity and reposition itself as a reliable supplier of global chains, which will be increasingly subject to instability and unpredictability.
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