Trade war benefits for Brazil, if any, will be smaller, says Itaú chief economist

Itaú Unibanco's chief economist, Mario Mesquita, has suggested that the benefits Brazil may gain from a new trade war prompted by Donald Trump's tariffs could be smaller than during Trump's first term. This is due to Brazil's already large market share in soybean exports to China and the possibility of Brazil being targeted with broader tariffs by Trump. Mesquita anticipates that the United States may raise tariffs, while Brazil is unlikely to lower its tariffs on imports from the United States, especially ethanol. Consequently, Mesquita forecasts that the benefits Brazil may derive from such a trade war would be diminished.

Itaú Unibanco's chief economist, Mario Mesquita, assessed this Tuesday, the 18th, that the benefits that Brazil could obtain in a new trade war triggered by Donald Trump's tariffs should be smaller than in the Republican's first term. From 2018 to 2020, Trump's first trade war, Mesquita recalled, benefited Brazil through the exchange of American agricultural products, mainly soybeans, in the Chinese market. Now, he compared, Brazil already has a large market share in soybean exports to China, so the room for growth has diminished. In addition, this time, Brazil could also be the target of broader tariffs from Trump, who threatens to apply the principle of reciprocity against countries that charge high tariffs on imports of American products. There will be negotiations, but the economist understands that the most likely outcome today is for the United States to raise tariffs, considering that Brazil is unlikely to lower the tax charged on the entry of products from the United ...