André Esteves defends dialogue and criticizes politicization in Donald Trump's tariff hike.
At a BTG event, a banker stated that Brazil must preserve its sovereignty without escalating tensions and warned of the economic risks of retaliation against the US.
247 - Even with a trade deficit with the United States, Brazil was targeted by the tariff hikes announced by US President Donald Trump, accompanied by "some undue politicization." This assessment was made by André Esteves, chairman of BTG Pactual, during a panel discussion on the macroeconomic situation at the event. AgroForum 2025, promoted by the bank and broadcast online. The statements were published by Valor Econômico.
According to Esteves, Brazil needs to preserve its sovereignty, but without escalating diplomatic and commercial tensions. "Having sovereignty doesn't mean not negotiating, it doesn't mean escalating tensions. Any responsible negotiator knows when to do things, and society gains nothing from us escalating," he stated, advocating a patient and constructive approach.
Mansueto: retaliation would increase inflation
BTG's chief economist, Mansueto Almeida, also participated in the debate and highlighted that Trump's measure surprised Brazil. "Last year, Brazil had a trade deficit of US$7,4 billion with the United States. We've had a trade deficit with the United States for ten years, and we were surprised by the 50% tariff increase," he stated.
He recalled that there was a partial retreat at the end of July, when a decree excluded about 700 items from the heaviest tariff. However, Mansueto considered that retaliating against the United States could be costly for the Brazilian economy. "If the small country retaliates back, it means much more expensive imports, which impacts inflation," he explained, citing economic theory.
The economist estimated that the impact on Brazil's GDP will be small, between 0,1% and 0,2%, and that, in the short term, the effect on inflation could even be a decrease, due to the greater domestic supply of products that were previously exported.
Criticisms of the American perspective and advocacy for moderation.
According to Esteves, the United States' trade policy is marked by a "somewhat mercantilist view" that sees trade deficits as a transfer of wealth to other countries. "This view seems a bit distorted from reality. The United States has had structural trade deficits since the early 70s, and yet no one has been more successful," he argued.
The banker emphasized that, despite the legitimacy of specific measures to alleviate "localized problems" in Brazil, the priority should be "to work towards lowering tensions, not increasing them." He criticized purely political confrontation strategies: "Although it may seem that a confrontational narrative could yield political dividends, I disagree with this view. It's a flash in the pan. Society will demand problem solvers, not troublemakers."
