The climbing in the commercial war between the United States and China continues to generate damage in the markets. In another chapter today (7), US President Donald Trump said he could impose additional rates of up to 50% on Chinese products if Beijing does not retain from the 34% rates he imposed last week.
The new offensive of the US president deepens the impasse between the two largest economies in the world, with immediate reflexes in the financial markets. According to Fernando Genta, chief economist at XP Asset, the movement signals that tariffs are no longer just a bargaining tool and began to characterize a ongoing trade war.
“These are not winners or losers, but who will lose more or less. The world scholarships are reflecting this with widespread falls.”
Genta and Gilberto Coelho, technical analyst at XP, participated in a special live from the Infomoneymediated by journalist Mariana Amaro, about the consequences of the intensification of the US -imposed tariff crisis to the rest of the world and especially China.
USA versus China: Conflict only generates losers
XP’s chief economist also pointed out that the perspective is that these tariffs become permanent, increasing the degree of global uncertainty.
“The market priced a conflict scenario. Tariffs are not limited to China and already reach historical partners, such as Mexico and Canada. With minimum rates of 10% and can reach 60%, as in the Chinese case, we are facing a new commercial reality,” he said.
For Brazil, the impact is still difficult to measure, as the country’s main commercial partner – China – is directly involved in the dispute.
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“The consequence is global and the macroeconomic scenario becomes almost impossible to anticipate. In the micro plane, Brazil had 10% rates fixed on exports to the US, because of our commercial deficit with them, but global volatility tends to penalize all markets,” explained the economist.
Possible recession on the horizon
The worsening of commercial tensions between the United States and China can lead the American economy to a significant slowdown, with a real possibility of recession, says Fernando Genta.
According to him, the US government is already preparing to mitigate the internal impacts of the so -called “tariff” and should use part of the revenue generated by new tariffs to offer credit to companies affected by the measure. Still, he believes that the country will face a shock of recession in the next quarters.
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“The market is already pricing five courts of interest by the Federal Reserve, and much of this is due to the expectation of an economic retraction in the face of this adverse scenario. There is a growing perception that the trade war will have profound effects on American economic activity.”
Currently, inflation in the United States is around 3% per year. With the imposition of new tariffs and the transfer of costs to consumers, you generally evaluate that this number can rise to up to 5%. Even with inflationary pressure, he believes that the Fed will have little room to act significantly in the short term.
“We do not see, at this time, a buoy of salvation from Federal Reserve. The American monetary authority is facing a dilemma: contain inflation or stimulate an economy in slowdown. None of the options are simple in a commercial war environment,” concluded the economist.
The scenario described by manure reflects the pessimism that spreads between investors, given the perspective of a longer cycle of tensions between the US and its main trading partners.
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