President Donald Trump’s retreat regarding import tariffs brought significant relief to global financial markets and Brazil, according to the assessment of Christopher Garman, executive director for the Americas of Eurasia Group-official content partner at WW, CNN Brazil. The decision to level rates by 10% for most countries, except for China, contributed to the reduction of fears of a climbing in international commercial tensions.
Garman also evaluates that this measure puts the world in a “better balance.” However, it points out that this does not represent an abandonment of the protectionist strategy of the United States.
Impact on American tariffs
Even after the retreat, the average tariff of products imported by the United States remains above 20%, a level not seen since 1910. In addition, the trade war with China remains intense, maintaining a scenario of uncertainty in global trade.
The analyst points out that Trump’s decision may be crucial to determine whether the world will face softer economic slowdown or deeper recession.
Scenarios for the Brazilian Economy
In a smoother discouraging scenario, even with a possible recession in the United States, Brazil could benefit from the relocation of capital. In this case, the real would not suffer such a sharp devaluation, which could result in a beneficial deflationary movement for the Brazilian economy.
On the other hand, if the global economy comes into a deeper recession, driven by an uncontrolled trade war, countries such as Brazil would suffer considerably. The devaluation of the currency would be more intense, leading to a scenario of greater inflation and less economic growth.
Garman concludes that the degree of discourse of the global economy has become a key variable for the upcoming presidential elections in Brazil, scheduled for 2026. The economic scenario that will be the result of current commercial decisions will have a significant impact on the country’s political and economic environment in the coming years.
