A new survey by the United Nations (UN) estimated who would gain an advantage and who would not benefit from the trade war waged between China and the United States. The countries of the European Union would be the biggest beneficiaries, capturing around 70 billion, according to the Report of the United Nations Conference on Trade and Development (UNCTAD). The mapping indicated that the dispute could yield a jump of up to US$10.5 billion for Brazilian exports.
The general result assessed by the document is that, far from the intention of overvaluing American production, making it difficult for the US to access products imported from China, Donald Trump can face a scenario where Chinese products will only be replaced by products from other countries, and not nationals.
The barriers imposed by China and the US amount to a total of US$ 50 billion for each of the two economies. “The confrontation quickly escalated, and in September 2018 the US imposed 10% tariffs covering $200 billion of Chinese imports,” according to the report. In response, Beijing has taken on a retaliation against US products worth $60 billion. In the expectation of an agreement between the two powers, the barriers that would come into force in January of this year, were postponed to March 1st.
With over 30 years of experience, economic analyst and consultant Carlo Barbieri believes that the consequences of this bilateral war are auspicious for Brazil. “We have seen a great commercial opportunity for Brazil to assert itself in these markets, especially here in the United States. It is possible that at this time the country will gain competitiveness from its products and reaffirm its robust commercial activity here in the US. We have the ideal conditions to occupy the position center of this dispute and win with it”, ponders the specialist.
Another favorable point raised by Barbieri is the geographic proximity of Brazil to the United States, the quality of products and the Brazilian workforce are attractions that should give the country a central position in the American commercial evaluation. “The United States is strengthening trade ties at this time. The current ideological political issue has also been favorable. Brazil can and should take advantage of this opportunity to further consolidate its relationship with the US”, assesses the economist, considering that there is no better time for Brazilian investments in the US.
BRAZILIAN INTERNATIONALIZATION FOR THE US
According to the Oxford Group consultancy, from an economic point of view, the US has become the desire and destination of companies in most parts of the world, due to its legal security, the strength of its currency and the stability of its institutions: in other words, the ideal base for the internationalization of companies. Barbieri says the US has shown strength
international and strong economic positioning.
“The current government, from an economic point of view, has implemented deep deregulation, to streamline the economy and remove unnecessary costs and delays in progress. With the market’s confidence, it valued the savings of Americans and those who invest in the US. More than $7 trillion was added to the value of investments on the stock exchanges. The growth rate has been double the average obtained in the last 8 years”, says economist Carlo Barbieri.
IDEAL SCENARIO TO INVEST
According to the expert, with the tax reform, the US is attracting thousands of headquarters of its companies back to the country, and many other entrepreneurs are looking at the possibility of setting up their global operations bases from the US. He highlights two reasons: low taxes for companies (they dropped from 35% to 21%) and personal, legal and institutional insecurity, in addition to Brazil’s precarious capacity for economic recovery, which is causing, even while maintaining its operations in the country, companies are organizing to internationalize and the US becomes their main destination.
“There is a change in the concept here in the United States, in which American taxation becomes territorial and not global for companies operating in other countries, which means that, in practice, especially in countries with tax treaties, the profits obtained in other countries are not taxed when brought to the US. The transfer of company headquarters is being rampant. Furthermore, the US has about 2000 ways to support and encourage companies that want to establish themselves in the US”, he says Barbieri.
With over 25 years of experience in the United States, Carlo Barbiei is President of the Oxford Group, the largest Brazilian consulting company in the US. Consultant, journalist, political analyst, speaker and educator. Founding member and first president of the Brazilian Business Group, founding member and president of the Brazil Club, and board member of the Deerfield Chamber of Commerce. Graduated in Economics and Law with more than 60 specialization courses in Brazil and abroad.