Christopher Garman: Truce between China and the US is a positive scenario for the real

Eurasia Group's Americas CEO Christopher Garman says the recent tariff truce between the United States and China represents positive news for Brazil.

According to Garman, although the agreement may limit the potential increase in Brazilian agribusiness exports to the Chinese market, the overall benefits outweigh this relative cost .

Garman argues that the truce avoids a more disastrous global economic scenario, which could negatively affect all countries, including Brazil.

For the Eurasia director, before the agreement, there was a risk of a deeper trade war between the two economic powers, which could result in a rupture in global trade chains and a possible global recession.

“In this scenario, countries with macroeconomic vulnerabilities, such as Brazil, could face a significant devaluation of their currency, leading to a scenario of lower growth and higher inflation,” observes Garman.

According to Garman, the truce — although it does not completely rule out the possibility of a recession in the United States — is expected to be milder, resulting in a smoother slowdown in the global economy. According to him, this could benefit Brazil in several ways:

1. Lower devaluation of the real, with the possibility of appreciation; 2. A more favorable global environment to attract Chinese investment to Brazil; 3. Potential for trade agreements, such as the one announced with the European Union;

4. Less severe economic impact on the country.