Analysis: Economic Impacts on Brazil with Trump or Biden as US President

RIO DE JANEIRO, BRAZIL – Renowned French essayist, Duke François de La Rouchefoucauld (1613-1680), had the gift of rhetoric, notably absent in Tuesday night’s debate between the candidates for the presidency of the United States, Republican Donald Trump and Democrat Joe Biden.

Both candidates’ eyes are focused, among other issues, on Brazil. Unfortunately, for negative reasons.

“The fame of great men ought to be judged always by the means they used to acquire it,” the Frenchman once taught. If considered by Brazil’s current reputation abroad, the means would not be noble at all. During the shouting that took place during the debate, the country presided over by Jair Bolsonaro was placed at the center of discussions by the Democratic candidate – and for a very bad reason: neglect of the Amazon.

“The rainforests of Brazil are being torn down,” began Biden, who pledged that, if elected, he would coordinate a coalition to raise funds to preserve the forest. On the other hand, he threatened, in the same statement, economic retaliation against Brazil if the current policies remain the same. “Here’s US$20 billion (R$100 billion), stop — stop tearing down the forest. And if you don’t, then you’re going to have significant economic consequences,” he said.

The proposal has had repercussions in the economic and environmental circles, but to those paying attention, this is nothing new. A report from AMCHAM, the Brazilian-American Chamber of Commerce based in São Paulo, has already pointed out the country’s potential opportunities in both scenarios, in the aftermath of Trump or Biden victories.

According to the survey that analyzes the candidates’ economic guidelines, Brazil is a prominent regional player in the dispute, and its relations with China, the country’s largest trading partner, will be at the core of discussions.

In the case of a democratic victory, the institution points out that trade relations between the two countries should follow a similar trend to the one currently existing between Brazil and the European Union member countries, which demand more effective policies from the Brazilian government with respect to the environment.

“If Biden is elected, Brazil can expect greater engagement by the United States in international issues. On the other hand, there should be greater focus on issues such as climate change, Amazon preservation, and minority rights, as is already the case with European countries,” states the AMCHAM report.

On the other hand, Donald Trump’s reappointment to the White House may, according to the organization, mean a greater rapprochement between the two nations, as a result of the relationship between the Bolsonaro family and the current American president. However, AMCHAM warns of a greater defense of a national-developmentalist and protectionist policy of the Republican in relation to Biden, whose party is more historically linked to globalist ideals.

“With Trump, the US economic rebound agenda should have a more nationalistic profile, with a protectionist slant on trade and points of friction in relation to Latin America, particularly around issues such as illegal immigration and drug trafficking,” says the institution. “The closeness of the Bolsonaro family with Donald Trump can be a facilitator for the strengthening of bilateral trade and investment agenda,” points out the report.

The two scenarios open up interesting opportunities for trade and investment between the two countries, highlights the AMCHAM, despite the opposing guidelines in relation to the trade ties of the United States in both scenarios.

According to the document, under Trump’s leadership, the United States has become more averse to multilateralism and to the actions of international organizations such as the World Trade Organization (WTO), the World Health Organization (WHO), and the United Nations (UN).

The report points out that Trump has also been critical of some free trade agreements signed by the United States (such as the NAFTA and the Transpacific Partnership) and tends to favor bilateral negotiations over negotiations involving multiple parties.

For its part, the Democratic Party continues to be more clearly in favor of participation in international organizations, in addition to advocating a multilateral approach to conflict resolution in foreign policy and more openly supporting free trade with other countries, although with greater emphasis on the inclusion of issues such as environmental protection and human rights, highlights the AMCHAM report.

The Brazilian government reacted to Biden’s statement: “Just one question: is Biden’s US$20 billion aid yearly?”said Ricardo Salles, Minister of the Environment. President Jair Bolsonaro, in turn, used social media to criticize Biden’s proposal. “The Democratic candidate to the US presidency, Joe Biden, stated yesterday that he could pay us as much as US$20 billion to stop the “destruction” of the Amazon Rainforest, adding that, if we did not accept this offer, he would then impose serious economic sanctions on our country,” began the President.

“What some have not yet understood is that Brazil has changed. Its President, unlike the left-wing presidents of the past, does not accept bribes, criminal land demarcations or cowardly threats. Our sovereignty is non-negotiable,” he concluded.

Source: Veja