December 6, 2019


1. Bolsonaro’s ally, Trump threatens tariffs on steel

This week, American president Donald Trump announced that he will impose tariffs on steel and aluminum imports from Brazil. Trump, who President Jair Bolsonaro considers an important ally, posted the decision on Twitter. Trump argued that the American dollar is constantly experiencing price increases in comparison to the Brazilian real, saying the value of Brazil’s currency is being manipulated by the government in order to favor exports. However, economists say the real operates on a floating exchange rate and therefore the Central Bank does not interfere with its value. Brazil has been exempt from tariffs since last year, when Trump backed down on charging 25% on steel and 10% on aluminum imports to protect the American market. Brazil is the second largest supplier of steel to the US, representing 14% of the volume used in the country. In response to Trump’s announcement, Bolsonaro said that he is in touch with Washington to discuss the announcement. Meanwhile, new businesses are at risk. “Clients want to know if the price will have a 25% tariff or not and – without knowing this – there is no way of closing a deal,” says the President of the Brazilian Steel Institute, Marco Lopes. Read more about the relationship between Bolsonaro and Trump at Brasília Report.

Folha de S.Paulo: Anúncio de Trump já afeta novos negócios
Valor: Trump ameaça taxar aço do Brasil e constrange Bolsonaro
G1: Entenda o anúncio de tarifas dos EUA sobre exportações de aço e alumínio

2. GDP increase raises Stock Exchange and causes devaluing of the dollar

The 0.6% growth of the Brazilian Gross Domestic Product (GDP) in the third quarter of the year had a positive impact in the financial market. For the first time, São Paulo’s Stock Exchange hit a record high of 110,000 points. Yesterday, it hit a new record with a 0.29% increase, reaching 110,625.9 points. These results also halted the price increase of the American dollar, which has been constantly increasing for the past few weeks in comparison to the Brazilian real. The growth of the economy surprised market analysts, who predicted a more moderate increase. The international market also influenced the positive results of the internal market. The main issue abroad is the expectation of a trade deal between China and the US, which would heat up the economy for the two countries.

Estado de S. Paulo: PIB ajuda Bolsa a bater novo recorde
Folha de S.Paulo: Bolsa vai a 110 mil pontos e bate novo recorde

3. Infrastructure investments in Brazil drop 24% over five years

Investments in infrastructure in Brazil had a 24% drop over the last five years. In 2019, the total amount invested in the sector will be around R$ 131.7 billion (USD$ 31.77 billion), while 2014 registered investments totalling R$ 172.9 billion (USD$ 41.71 billion). The data was shared this week by the Brazilian Association of Infrastructure and Basic Industries (ABDIB), an organization that gathers companies involved in the sector, including infrastructure industries, equipment manufacturers, public services companies and others. According To ADBID, this situation is worrying because the infrastructure sector is one of the main generators of jobs and income. One of the reasons why investments have been so low – besides the economic recession the country has been facing – is the fiscal deficit, which limits the amount the government can invest in the sector.

O Globo: Investimento em infraestrutura caiu 24% desde 2014, diz Abdib

4. Same-sex civil partnerships grow by 61.7% following conservative wave

In 2018, Brazil registered a 61.7% increase in same-sex civil partnerships. Data from the Brazilian Institute of Geography and Statistics (IBGE) reveals that fear of a possible victory by a conservative presidential candidate could lead to fewer rights for the LGBT community and these types of partnerships. To corroborate the idea that couples married because of this fear, IBGE notes that 42% of the unions between same-sex couples that took place in 2018 happened after the election results were announced, in November and December. The study also shows that the number of same-sex marriages went from 5,887 in 2017 to 8,520 in 2018, a 61.7% increase.

Valor: Casamento homoafetivo cresce 61,7% em 2018, aponta IBGE

5. Brazil drops positions in world ranking of mathematics performance

According to data from the Programme for International Student Assessment, published on Tuesday, Brazil dropped positions in the world ranking of mathematics performance. The performance of Brazilian students, on the test that assesses mathematical knowledge, ranked the country as one of the 10 lowest performers. The tests were conducted by the Organization for Economic Co-operation and Development (OECD) in 2018. Even though the number of countries evaluated increased from 70 to 80, Brazil still had negative results. According to the tests, two thirds of 15-years old Brazilians do not know even basic mathematical skills. In South America, Chile had the best result and Argentina the worst.

G1: Brasil cai em ranking mundial de educação em matemática e ciências

Brasilia Report

Click here for the Brasilia Report, a weekly analysis prepared by JeffreyGroup Senior Advisor in Brasilia, Gustavo Krieger.