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With the appreciation of the dollar and economic uncertainties, the US election could have a major impact on Brazil. Is Donald Trump or Kamala Harris the best choice for our economy? Let's explore how each person's policies can influence reality!
According to see, the dollar has been on high, complicating real life. Elections in the United States, which are approaching, promise to stir even more with our already weakened Brazilian currency. Considering the expected evolution of the dollar against the real in the coming months, who should we root for: Donald Trump of the Republican Party, or Kamala Harris, from the Democrats? The answer is not simple and involves several economic and political factors.
The impact of the strong dollar
Since the beginning of Donald Trump's government in 2017, the dollar has performed volatile in relation to the real. Data central bank show that the dollar rose from R$3,26, in January 2017, for R$5,19 in December 2020, an increase of 59%. With Joe Biden as president, the scenario was not much different, and prices have already exceeded R$5,70.
Economists attribute this appreciation of the dollar to several factors. The statements of the President Lula criticizing the Central Bank and signaling the desire to interfere in the interest rate are one of the causes. Furthermore, the expectation of a possible victory for Trump, who could adopt more protectionist trade policies, harming emerging economies like Brazil, also weighs in this equation. The Federal Reserve (the American central bank) recently indicated the possibility of cutting interest rates, which also influences the foreign exchange market.
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Trump and Harris Policies: What to Expect?
Donald Trump, during his term, expressed the desire to have a weaker dollar to favor American exports. However, as the dollar is free-floating, this is more of a wish than an implementable policy. Periods of weak dollars tend to be better for Brazil, as they make our products more competitive on the international market. However, Trump is also known for his protectionist tariffs, which although mainly aimed at China, may have repercussions for Brazil.
Moreover, Kamala Harris, although he has not directly expressed his opinions on the dollar, represents a party that tends to adopt policies more focused on international cooperation and multilateralism. This could mean a more stable and predictable, which is positive for Brazil. “Nobody knows what Kamala thinks about the dollar“, says a renowned economist, but many believe that his policies would be less turbulent compared to Trump’s.
The impact on the Brazilian economy
The appreciation of the dollar has direct implications for the Brazilian economy. A strong dollar increases import costs, putting pressure on inflation and negatively affecting the purchasing power of Brazilians. Furthermore, exchange rate instability can drive away foreign investors, who prefer more predictable economic environments. The pressure on the real also influences the Central Bank's decisions regarding interest rates. The need to control inflation can lead to a rise in interest rates, which can slow economic growth.
Who is better for Brazil?
Amid these uncertainties, who would be better for Brazil: Trump or Kamala? Some economists argue that Kamala Harris, with her more balanced and less protectionist policies, would be the ideal choice. “Kamala, of course!”, responds one of the Plano Real parents. “Forget the economy. Values matter”, he concludes. On the other hand, other economists point out that Trump's policies, focused on a weaker dollar, could be beneficial for Brazilian exports, despite the risks associated with his protectionist tariffs.
Ultimately, the answer depends on which aspect of American economic policy will have the most weight on the Brazilian economy. What is certain is that the US elections will have a significant impact on our currency and economy for years to come.. Therefore, it is crucial to pay attention to developments and prepare for the possible scenarios that will emerge based on the results of the polls.
An election with global impact
The American election is a global event that affects not only the United States, but also countries like Brazil. Whether Trump or Kamala Harris is the winner, the policies adopted will have important repercussions on the Brazilian economy. The appreciation of the dollar, inflation, interest rates and economic stability are just some of the factors that will be at play. Therefore, the best strategy is to closely monitor the elections and prepare for the possible impacts on our economy.
Two psychopaths, crooked, immoral...good for those who lead them. Decadence, horror.