AFP/File / Yasuyoshi Chiba An open letter addressed to the WHO by international doctors, scientists and researchers said holding the Olympics in Rio de Janeiro, the second worst Zika virus affected city in Brazil, would be
AFP/File / Yasuyoshi Chiba An open letter addressed to the WHO by international doctors, scientists and researchers said holding the Olympics in Rio de Janeiro, the second worst Zika virus affected city in Brazil, would be "irresponsible" and "unethical"

The presidency of Donald Trump is generating “great uncertainty” in Brazil in terms of what this could mean for commercial relations between both countries.

Political and economic consultant, José Mauro Delella, told Xinhua that there is “an unpredictability about what policies Trump will adopt,” as he took power on Friday.

Delella said that Trump is an “outsider” without party affiliation and without interest in the “status quo, who has adopted a discourse of confrontation.”

However, the expert said that “protectionist measures and commercial barriers the U.S. could impost would have a limited impact on Brazilian exporters.”

This is because these exporters are currently favored by the bullish trend for raw materials on international markets, which reflects a rise in demand.

Delella also predicted that the recovery of raw material prices would continue in 2017, which would mitigate the potential negative fallout of U.S. interest rate hikes and capital flight from the Brazilian financial market.

“Trade protectionism, the focus on fiscal policy and deregulation that Trump defends will intensify inflationary trends in the U.S.,” pointed out the expert.

In the same line, Vladimir Maciel, coordinator of economic and market studies at Mackenzie Presbyterian University in Sao Paulo, said that “unknowns have not yet been resolved” concerning Trump’s presidency.

These unknowns “include which position Trump will take. If he continues the stance he took on the campaign trial or if he acts much more responsibly and take the advice of his economic team, which contains experienced specialists.”

According to Maciel, this uncertainty could lead to a “change in the relationship between Brazil and its second-largest trading partner, after China.”

The professor said that a stimulus strategy for local industry in the U.S. would impact “Brazil’s automotive industry and the export of processed foodstuffs.”

However, Maciel said that a removal of investments by American companies in Brazil would be “improbably” as “they have a very large international capacity and it is not easy to make short-term changes to production systems.”

Maciel also pointed out that the U.S. has also periodically applied protectionist measures in the past, such as for “steel, cotton and ethanol.”

He predicted that Brazilian exporters are already accustomed to “defensive policies by the U.S.” and that Trump’s arrival “will not greatly change this scenario.”

Concerning rapid interest price hikes in the U.S., Maciel concluded that this might actually attract international investors who “want to take advantage of the risk in Brazil.” Enditem

Source: Pau Ramírez, Xinhua/NewsGhana.com.gh

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