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Understand how Trump and Lula's decisions are reshaping the global economic scenario
The recent escalation of tensions between Donald Trump, elected president of the EUA, and the government of Squid has placed Brazil at the center of a political and economic confrontation with global impacts. The possibility of taxation of 100% on products originating from the BRICS countries, announced by Trump, reignited the debate about dependence on the dollar in international transactions and the future of Brazil-United States relations.
Where does this friction between Lula and Trump come from?
The animosity between the leaders began in 2022, when Lula assumed the presidency and decided to position Brazil alongside powers such as Russia e China, two great antagonists of the EUA. In 2023, Lula's support for Hamas during the conflict with Israel and Brazil's proximity to countries such as Iran e North Korea worsened the negative perception in republican circles.
In 2024, during the US presidential campaign, Lula declared his support for Kamala Harris, Trump's direct opponent, and even called him a Nazi, further inflaming tensions. Now, with Trump's victory and his imminent inauguration in 2025, promises to retaliate economically against Brazil are beginning to take shape.
- Dismissal of civil servants shocks workers in Brazilian city
- Brazil is now the country with the highest taxes in the world after a controversial tax reform that divides economists, politicians and scares the population
- Brazil's GDP growth hits 2,8% in 2024, but World Bank warns of fiscal challenges due to pension spending and public debt
- This is the new BIGGEST farm in Brazil, impressive for its surprising size, valued at 30 BILLION, has 970 km of roads and could house 10 countries together
BRICS under attack: Product taxation is the first weapon
Donald Trump has made it clear that he will not allow BRICS countries implement an alternative currency to the dollar without consequences. He stated that any attempt to replace the dollar will result in 100% tariffs on products exported to the US. For Brazil, which exported US$29,4 billion to the US between January and September 2024, including oil, beef e aircraft, this measure would be devastating.
Lula, however, insists on the creation of a BRICS currency, reinforcing his rhetoric against the dollar. In 2023, he already asked: “Why should all countries trade in dollars?” This view, however, does not take into account historical agreements, such as Bretton Woods, which consolidated the dollar as a global reference.
The impact of taxation for Brazil
With Trump determined to protect the interests of EUA, Brazil faces significant risks. Such an aggressive taxation would directly harm Brazilian exports and could destabilize key sectors of the economy, such as agribusiness and the aeronautics industry.
Furthermore, the trade flow of more than US$60 billion between the two countries could plummet, worsening Brazil's isolation in the North American market. It is important to remember that the US is one of Brazil's largest trading partners, and losing this relationship would be disastrous.
Lula versus Trump: Who gives in first?
While Trump is adopting a tough and strategic stance, Lula faces the difficult task of balancing his international alliances and protecting the Brazilian economy. The Brazilian government has indicated that it prefers to avoid direct confrontation, but the challenge will be to deal with Trump's demands without compromising its ambitions in the BRICS.
Geopolitics is really difficult
This report contains some mistakes, but Brazil and the BRICS are on the right track. Enough of the dominance of a single nation…