Jul. 10 at 3:28 PM
$EWZ $EWZS When a tariff decision appears almost if not entirely political, we need to go over the facts.
#Brazil Trump's beef is about President Bolsonaro, the prior President of Brazil, who is facing charges for lying about the Brazilian voting system and staging a coup on Jan. 8, 2023. It's also claimed he plotted to poison the current president of Brazil, Lula, as well as assassinate the Supreme Court Justice Alexandre de Moraes.
Sound familiar? ;)
Bolsonaro is like Trump election denial on steroids in other words. It's so unfair to be prosecuted for attacking your own government and planning assassinations!
Trump also complained about censorship of US tech social media companies, which is a NON-trade issue.
The other BS is that Brazil is unfair to the US in trade.
The truth is that the US has a
$6-7 Billion trade SURPLUS with Brazil, not a deficit! At the current rate as of May the surplus this year will be
$7.75 Billion.
In other words, compared to many other countries and regions like the EU that has net of services trade with the US a
$161 B deficit with the US and China's is
$250 B per year at the current rate, Brazil could argue that IT should be the country penalizing US imports to Brazil!
This means that the 50% tariff imposed by Trump is way out of proportion to reality.
If there are particular product barriers in place in Brazil, those can be negotiated, but Trump's beef is almost entirely POLITICAL until proven otherwise.
For these reasons, until I find other information that supports the charge of unfair trade practices, I'll be holding my modest Brazilian market exposure and see if the market wakes up to the truth. If not, there's always the exit...
