Trump’s ‘Tariff’: understand the scale of the measures for Brazil

Trump’s ‘Tariff’: understand the scale of the measures for Brazil

Brazilian products such as auto parts, sheet metal, airplanes and industrial machines could lose competitiveness

Brazil Sphere

(Image: Freepik)

The announcement by United States President Donald Trump, who imposed a series of tariffs on more than 180 countries, still causes great uncertainty in global markets. This Monday, 7th, stock markets plummeted in Europe and Asia, highlighting widespread fear about the direction of international trade with the possibility of even greater taxation from China.

According to lawyer Júlio César Soares, partner at the firm Dias de Souza, specialized in Tax and Customs Law, Trump's measures contradict guidelines established by the World Trade Organization, including the Most Favored Nation Principle, which prohibits tariff discrimination between commercial partners.

"This more aggressive stance leaves the environment conducive to the general increase in trade barriers in reaction to protectionist measures. And recent history teaches that the increase in tariffs contributes more to the retraction of global trade than to the internal strengthening of the economy", he pondered.

For tax lawyer Marcos Correia Piqueira Maia, partner at Maneira Advogados, although it is premature to make any kind of assessment on the impacts of Trump's measures, the new tariffs imposed above all represent a paradigm shift in the business environment in the United States, and this, consequently, should impact trade flows across the planet. In the domestic environment, the horizon projects an increase in inflation and consequent monetary tightening to be imposed by the Federal Reserve.

"Companies will have to reorganize themselves legally and tax-wise. Today, an automobile part sold in the United States passed through several countries until it was completed. So, companies that need imported parts will certainly be impacted by this new tariff policy", he assessed.

Reciprocity PL

Given the circumstances, Brazilian products such as auto parts, sheet metal, aircraft and industrial machines could lose competitiveness in the United States market, according to projections by federal deputy Luiz Carlos Hauly. In the automotive sector, automakers based in Brazil could lose participation in international production chains, and there is also a risk of unfair competition with the redirection of surplus European and Asian vehicles to Brazil.

As a way of trying to mitigate these negative consequences, the political class approved the so-called Reciprocity Bill, which establishes measures to be applied against countries that interfere in Brazilian trade policy or configure unilateral measures based on environmental requirements that are more onerous than Brazilian protection standards. These countermeasures must be proportionate to the economic impact caused by actions taken by other countries.

https://exame.com/esferabrasil/tarifaco-de-trump-entenda-a-dimensao-das-medidas-para-o-brasil/