Rubens Ricupero: “It is not worth talking about approaching China after Trump’s rates”

“I don’t see anyone who is gaining from it so far. Not even Americans will gain something from it, ”says ambassador Rubens Ricupero, former Minister of Finance and Environment. In an interview with InfomoneyHe said he did not believe US President Donald Trump to be able to support this higher rates for long.

In its opinion, Brazil is not among Trump’s attack priorities, but the country should be indirectly affected by more general rates, such as the possible collection of steel and aluminum taxes, as happened in the first term of the Republican.

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Ricupro states that the moment is of caution, to accompany at a distance. The best way out is avoid provocations in relation to China and the Brics Blockto which Trump has “a great hostility,” he says.

In the worst scenarios, with Brazil becoming target and being charged, the former minister says that the country has resources and space to argue and try to reverse the situation. However, he says he cannot predict scenarios or anticipate what can happen, since one of Donald Trump’s main features, which he is even proud to be his unpredictability.

Read Infoomoney’s full interview with former Finance Minister Rubens Ricupero:

Infoomoney: What is the risk for Brazil in the midst of this United States tariffs fight with other countries?

RUBENS RICUPERO: In principle, at least in this early Trump administration, Brazil does not seem to appear among the priorities. He has already mentioned Brazil along with other countries, such as India and the European Union, as a country with high tariffs. But it never came in much detail about it, nor did it have made specific threats.

The curious thing about him, as people are observing, is that he preferably affects the closest countries not only geographically, but also from the point of view of trade agreements, is the case of Mexico and Canada, although he has suspended by a month. In the case of Brazil, there is also no free trade agreement with the United States.

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Another thing in favor of Brazil is that, so far, most of the years, Americans have had surplus with Brazil. Last year, the surplus was smaller, but still they had a small balance. Despite all this, no tranquility can be seen. He is very at the beginning of his term, not even a month.

IM: If tariffs happen, how much can Brazil be impaired from a commercial point of view and in the balance balance?

RR: Brazil’s trade with the United States is important. The US is the second largest commercial partner, but it is much less than China. Although it is true that there is a quality difference.

In the case of China, we mainly export commodities, soy in grain, gross oil, iron ore. In the case of the United States, more than 80% of our exports are manufacturing, and even even high technology, such as Embraer planes. Now, most of these manufactured ones are produced by American companies here in Brazil.

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But there is an aspect that is almost certain that Brazil will be hit, which is in the matter of steel and aluminum. Already in Trump’s first term he applied tariffs on steel and aluminum to all suppliers. And he already said this time that he will apply too, and some of the Brazilian export is of these products.

Now, although the American market is important, it is not as vital as China is. China represents 28%, until a little more of the total Brazilian sales. And Asia, together, represents 50%. The United States is much smaller, varying according to the year, 10%, sometimes a little more.

IM: And Brazil as a strong country of the BRICS? Thinking of the block as a whole, can the country be charged or otherwise harmed?

RR: In this political plane, of ideology, I think there are more negative questions. He (Trump) has no sympathy for Lula. He considers Lula a dangerous leftist. He has more affinity for (Javier) Milei from Argentina. But that in itself does not mean much.

Now, another complicated thing is that he has a great hostility to the BRICS. Brazil this year presides over the BRICS and will make the summit in July. So you will have to be very careful at this meeting to avoid any kind of action that may seem a provocation. So far, nothing is known about the BRICS agenda. What will they argue?

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In the past, there was a light way on the idea of ​​trying to replace the dollar as currency, but this is an almost unfeasible idea. No one has ever managed to do this in the world, because the dollar has a great domination. I think, so, it seems obvious to me that it is better not to talk about it, because he has said that if they try to do this, he will apply 100%tariffs.

So that’s what you can say. More than this is difficult, because he is a person much driven by whims and knows what can cause his attention. It is best to avoid raising any subject that can cause such a measure.

IM: Would Brazil have conditions or means of retaliating the US if the Trump impose fares on our products? Do you believe Lula would do something in this regard?

RR: I think Brazil has a certain basis. For example, he has once complained that Brazil has a high tariff over ethanol, which is American corn ethanol. Maybe there is a perspective in Brazil to make any concession in ethanol to prevent it from reaching other things. But it is hard to advance much more than that because he is proud of it, of being an unpredictable person. And it is, in fact, what he is.

So there is no way we can guess much what his next movement will be. To some extent, it is best to wait for this trend to moderate, because, over time, I don’t know if it will be able to keep these rates.

He applied rates to Mexico and Canada one day, the next day suspended. Nothing happened. You know that, in fact, Canada nor Mexico are able to prevent immigrants or drug smuggling. But, as Trump never mentions clearly what is the quantitative goal of what he wants, he has the free field and can say he has won, that others have gone in everything.

IM: Against China, so far, it seems that the 10% rate will follow. Can Brazil benefit from this situation, increasing trade and getting closer to China?

RR: I think you don’t even apply to talk about it because that would be a provocation to him (Trump). And I don’t think so, because you see, Brazil doesn’t sell manufactures to China. So China is not a substitute for the United States as an alternative market.

It may even be the Chinese, pressured by Americans, buy more soy from the United States and not from Brazil. That is, some damage will suffer, but not only Brazil. I would say that the whole world will be harmed by his policy. I don’t see anyone who is gaining from it so far. Not even Americans will earn something from it.

IM: In this matter of “even Americans will win”, what has been spoken a lot is the inflationary risk to the country. If this risk proves, even if Trump does not impose fares against Brazil, can we be indirectly affected by an inflation export?

RR: Look, if in fact inflation rises a lot there, it will happen, the whole world will suffer this impact, Brazil too. In the case of Brazil, we already have an increase inflation, it is already a concern. I think that, in view of this, the Brazilian government, the best one would have to do is what it has so far refused to do, which is to seek measures against budget spending that is causing this increase in inflation in Brazil to make the country less vulnerable.

Now, nobody knows either if this effect will happen, and if it happens, to what extent, to what degree? Because what is said is that in his first term, although he also increased the rates, the impact of American inflation was very small.

But at that time, the conjuncture was different, it was a low inflation conjuncture worldwide. Now the complication is greater.