By EDUARDO VASCO*
Donald Trump's threats, if implemented, could have positive results for Brazil. The Brazilian government could retaliate and impose reciprocal tariffs on imports from the US
1.
Brazil's relations with the United States are likely to deteriorate significantly since Donald Trump took office. And not just between President Lula and his government, but also between the Brazilian bourgeoisie and the American bourgeoisie.
Brasília's trade balance with Washington (our second largest trading partner) is in deficit. Between January and November, our exports reached R$221,26 billion (US$36,57 billion), while imports reached R$226 billion (US$37,36 billion). We had a loss of R$4,8 billion (US$790 million).
Until the implementation and consolidation of the neoliberal regime in Brazil in the 1990s, trade with the United States had been in surplus. However, from 1995 onwards we began to import more and export less to the Americans, with trade in deficit between 1995 and 1999, at the height of privatizations and the transfer of large national properties to foreign capital.
In 2000 the balance returned to a positive balance, but from 2009 onwards – and since then, that is, for 15 years – we have once again had one trade deficit after another with the US. Our accumulated deficit over the last 15 years is R$231,4 billion (US$67,9 billion).
The reason for this is that the nature of bilateral trade is, strictly speaking, semi-colonial. In the last 15 years, we have sold the United States basically crude oil and fuels, agricultural and food products, which the Americans then refined and sold back to us, with a high added value, along with fertilizers.
What saves us are the exports of aircraft and high-tech equipment, but we also buy industrial machinery and equipment. For a change, like every relationship between a developed country and a backward country, the US buys from us, mostly, commodities (with low added value) and sells us manufactured goods (with high added value).
Donald Trump will continue this tradition and has already announced that he wants to apply tariffs against Brazilian products. On December 16, he named Brazil as an example of a country that will be subject to new tariffs. “If anyone taxes us, we will tax them back,” he said.
But the US already taxes a number of products from Brazil. In 2023, the value of Brazilian products imported by the US that were subject to import surcharges was US$233 million. And there is a pressure from large steel companies against the revocation of the right antidumping on the import of certain types of Brazilian steel, made at the beginning of 2024 – after 32 years. The US is already the country with the most protectionist measures against Brazil and, in 2018, Donald Trump classified our steel exports as a “threat to US national security”.
After being elected President of the United States for the second time, Donald Trump also announced his intention to impose 100% tariffs on products imported from BRICS countries, if they implement his ideas. de-dollarization of its commercial transactions.
2.
Donald Trump's threats, however, if implemented, could have positive results for Brazil. The Brazilian government would probably retaliate and impose reciprocal tariffs on imports from the US. In addition, the dollar's appreciation in relation to the real makes our imports even more expensive.
It is a chance to invest in domestic production and effectively implement Lula's reindustrialization plan, which still leaves much to be desired and does not intend to reverse the historic destruction of national industry due to the implementation of neoliberalism – which continues to be the pillar of the Brazilian economic structure. The State's incentive to the domestic market could also offset the advantages of local producers in exporting with the higher dollar, so that they can sell more within Brazil and not increase prices for Brazilian consumers.
Furthermore, it is a chance to raise the level of diversification Brazil's trade relations. The BRICS countries are partners with whom much of the trade with the US, which has been uneven for years and affected by Donald Trump's measures, could be replaced. Mercosur and other neighbors could also play an important role in this diversification, as could Asian nations, considering that the port of Chancay in Peru is already operational and that it could be connected by train and highways to the port of Santos.
If the Mercosur-EU agreement did not have the same character as the historical relations with the capitalist powers, it could also serve Brazil to reduce its dependence on the USA. Analysts consulted by Brazilian newspapers have even predicted that several products that until now have been sold to the USA will be destined for China and Europe.
In the same period (2009-2024) in which it had a deficit of almost US$ 70 billion with the USA, Brazil had a surplus of more than US$ 300 billion with China. In 2019, the trade balance with China represented 83% of Brazil's total balance in its trade balance with the world, according to study by Pedro Garrido da Costa Lima for the Chamber of Deputies.
However, due to the implementation of neoliberalism, the quality of exports has fallen (74% were products from the manufacturing industry in 1997, but in 2022 they were only 22,5% of the total, with more than 37% being from agriculture and 40% from the extractive industry). Hence the urgency of reindustrialization, so that there is not only a diversification of partners, but also a qualification of trade.
More than anything, however, the diversification and qualification of trade relations plays a strategic role in Brazilian geopolitics. The United States has always treated Brazil – as well as all of Latin America, even more than the rest of the world – as a colony. Not only from a commercial point of view, but also politically and culturally. But this is only possible because it dominates our economic relations.
If Brazil wants to be a truly independent country, it must necessarily leave behind this relationship of economic subordination with the United States.
*Edward Basque is a journalist. Author, among other books, of The Forgotten People: A History of Genocide and Resistance in Donbass. [https://amzn.to/3AjFjdK]
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