In a meeting with entrepreneurs at the headquarters of the Federation of Industries of the State of São Paulo (FIESP) on the morning of Friday (14), the president of the Central Bank (BC), Gabriel Galipolo, said that the rates being imposed on Several countries by US President Donald Trump may have a lower effect in Brazil than in other economies, such as Mexico.
“This lower relationship, or commercial connection, from Brazil with the United States, compared to Mexico, induced sensation by market agents that eventually a heavier tariff policy could harm Mexico more than Brazil,” he said . However, Galipolo stressed that there would be no “trade war.”
“Note that there is a subtlety here: I’m not saying that with tariffs, it is better for Brazil. Surely there is no doubt that in any condition of global trade it is better not to have a tariff war. What I am Putting here simply is that in relative, that is, comparatively, perhaps for Brazil it is less harmful than, for example, for Mexico, “said the president of the Central Bank.
Reciprocity
Today, President Luiz Inacio Lula da Silva reaffirmed that Brazil will apply the Principle of reciprocityif US President Donald Trump, fulfills the promise of raising the country’s import tariffs. “I heard that it will tax the Brazilian steel. If I tax the Brazilian steel, we will react commercially, or we will denounce the organization [Mundial] trade [OMC]or let’s tax the products we matter from them, ”he said in an interview with Radio Clube do Pará, in Belém.
Trump has been promising to apply comprehensive tariffs to several countries that have commercial surplus with the United States, such as China, and even closest partners such as Mexico and Canada. The US president also announced a 25% tax on steel and aluminum imports, canceling exempt tax exemptions and quotas for major suppliers, including Brazil.
“Ghosts”
Also during the conversation with the entrepreneurs, Galipolo stated that the Central Bank has a preventive and conservative performance in defining its policy, always acting based on trends, not volatilities, and maintaining caution in the interpretation of the data.
“Therefore, I said that it is important that the Central Bank has the time to consume this data and be clear if we are not simply watching a volatility that is responsible for this high frequency data and being sure if we are able to observe a trend,” he is, ” He stressed. “It would be a mistake to be preventive to a ghost that is not placed there.
Asked by entrepreneurs about the high interest rate in the country, Galipolo said that this measure will have an effect to contain high inflation in the country. “On the horizon we can see, the projections have inflation outside the goal. The Central Bank reacts to the interest rate, at a restrictive level and relative security. The Central Bank’s mandate is to place the interest rate at a sufficient restrictive level and for the time it is necessary so that inflation can converge for the goal, ”he added.
“The medicine will work. The Central Bank has the tools to conduct monetary policy, to pursue the goal, and will not steal to do so, “he concluded.
