According to The Wall Street Journal (WSJ), Brazil has found itself in the most advantageous position in the global trade war. Incredible that someone might benefit from trade-related headwinds. You may wonder how a country that is not the most powerful economically has managed to find the resources.
Analysts at WSJ reckon that Brazil has emerged as the winner in the global tariff standoff sparked by the United States. Some investors are already betting on this South American nation. Brazil has some experience in this: it acted in the same way during the first presidential term of Donald Trump.
China has started to inject funds into the Brazilian economy, stocking up on soybeans from the country. Earlier, China’s authorities responded to Trump’s tariffs by imposing a 15% levy on American agricultural imports. Brazilian farmers are also expected to enjoy a high demand for cotton and chicken meat. Furthermore, Brazil could increase its footwear exports to the US as a replacement for Chinese products. However, Brazil still faces the looming threat of American tariffs. Yet, restrictions from Trump’s administration on this country could end up being lower than those imposed on China. In such a scenario, products from the South American nation would become more competitive. “Trump is restructuring global trade, and this is opening new opportunities,” Andre Perfecto, Chief Economist at consulting firm APCE,
Bloomberg analysts say that the aggressive economic policy of the US president could cause massive damage to global trade. "The losses could amount to tens of trillions of dollars," the think tank notes. In the worst-case scenario, the total damage could reach an impressive $33 trillion. Developing economies, particularly the BRICS countries, including Brazil and China, will bear the brunt of the impact.
