What will be the impact of the Trump government on the Brazilian economy?

What will be the impact of the Trump government on the Brazilian economy? After eight years of Barack Obama's administration, marked by economic policies aimed at the US recovery from the 2008 crisis, President-elect Donald Trump assumes the White House on Jan. 20 with controversial proposals that will impact the economies of other countries , Including in Brazil. To understand them, it is important to understand the economic heritage of their predecessor. Obama took office in a period marked by the worst financial crisis since the Great Depression of 1929. The consequences for the US economy came in the high unemployment rate, which in 2009 reached more than 10%, and the negative growth of the Gross Domestic Product (GDP) fell to 2.4% in 2009, according to the US Department of Commerce, followed by a federal public deficit that represented 9.8% of GDP. In order to combat the subprime crisis caused by the malfunctioning of financial markets and reverse the wave of unemployment, Obama signed the so-called "2009 Recovery Act" (American Recovery and Reinvestment Act). This project cost more than $ 800 billion and contributed to GDP growth - which grew after 2009 - and job creation. The measure follows what is favored by the Keynesian theory, which defends the prioritization of the public sphere to the detriment of the private sphere in periods of recession. Aiming for recovery, Obama imposed 560 regulatory rules that concerned improvements in working conditions, the implementation of equal rights for minorities, and support for those who had been dismissed. In addition, in addition to the excess of regulation, there was also a greater rigidity in the supervision of the financial sector in the country. Regarding foreign policy, the Transpacific Partnership (TPP) was signed in 2015 with 11 other countries (not yet ratified by Congress) to liberate trade in services such as software engineering and financial consulting. At the end of his second term, the Obama administration managed to reduce the unemployment rate to 4.6 percent, producing more than 11 million jobs (many of them precarious), increasing the GDP growth rate to 3.5 percent, followed by A federal public deficit corresponding to 3.2% of GDP and keeping inflation at 1.7% below the 2% target. However, there was a decrease in the average annual income and an increase in social and economic inequalities. From this, one wonders: what will the newly elected president, Donald Trump, do with this economic and social "heritage" left by his predecessor? Among Trump's proposals, the Transpacific Partnership agreement is extinguished - in its place, it intends to make bilateral agreements with some of the countries to bring industries to the United States and thus generate more jobs. In addition, Trump intends to reformulate the NAFTA agreement (US, Canada and Mexico), pointing to higher tariffs as a way to reduce the trade deficit with Mexico and also increase the country's productivity by encouraging investment in research, manufacturing and hand Of national works. This logic of preserving jobs in the United States and reducing the US deficit in international transactions has consequences coined by economists such as "Trump Effect." It is important to emphasize that the age pyramid, in a few years, will be composed of a larger number of economically inactive population, which reinforces the need to use immigrant labor. In addition, the threat of a surcharge to factories built outside the US has already had consequences: Ford canceled the $ 1.6 billion investment in Mexico. In this sense, multinationals with several factories around the globe may be affected But how would Brazil be affected by Trump's proposals? First, it threatened to tax 45% of products imported from China. If this does occur, it will affect China's economic activity, reduce its imports of commodities, and cause losses for Brazilian exports. Trump's protectionism will also affect our export of soybeans and meat to the United States. If these measures take effect, price inflation is likely to occur in the US, since the cost of producing in the US is much higher than in China and developing countries. If this occurs, the Federal Reserve may increase the interest rate. In order not to lose capital invested, it is possible that our fall in the Selic rate will be interrupted - if not, we will lose a flow of dollars which can generate inflation. In short, because of the US policies implemented to promote social welfare and combat the financial crisis during the Obama administration, Donald Trump inherited a period of greater economic growth compared to 2009. However, an exacerbated protectionism of the new Government may have negative consequences for the world economy, especially for emerging countries.