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Truce in the Trade War Between China and the US Can Cause Damage to Brazil?

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BRASILIA, Brazil – A tentative temporary agreement between the presidents of China and the United States parallel to the G20, defining a 90-day truce in the trade confrontation between the two countries, has raised concerns in Brazil about the possible impact of this understanding on the national economy. But, after all, should Brazilians really care?

The agreement in question signed by Donald Trump and Xi Jiping expects the United States not to raise tariffs of over $200 billion on Chinese products by 10% to 25%, while China is expected to increase imports of industrial products, agriculture and the US energy sector.

Although a trade war between powers is not something interesting for world stability, the truth is that the restrictions between Beijing and Washington over the last few months has boosted Brazilian soy exports to the Chinese market. Other than that, Brazil also competes with the US in other sectors. Thus, if American products are prioritized by China, the situation may become uncomfortable for some Brazilian exporters, especially at a time when the elected government of Jair Bolsonaro shows signs of further alignment with the United States, to the detriment of other partners.

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According to economist and business consultant Roberto Dumas, a professor at the Ibmec-SP, Brazil obviously needs to take advantage of this window of opportunity that opened with the trade war between Washington and Beijing, but in a cautious way. According to him, while the new government should try to sew deals with China and get closer to the US, the Brazilian businessman, in turn, should not make a very high bet in a situation that may not last long.

“The problem here is not the risk, the problem here is the absolute uncertainty, I do not know where the boat is going,” he said.

Dumas believes that the new administration in the Planalto Palace should seek to maintain the maximum possible neutrality amid the disputes between these two giants of the world economy, in order to maintain the Brazilian gains.

According to the Ibmec expert, regardless of Jair Bolsonaro’s polemical statements that were negative about China, there is no way to highlight the primary importance that Chinese investments have for Brazil today. He believes the firm stances against Beijing were a kind of “misunderstanding,” which may well be adjusted after the inauguration.

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