Pequenas Empresas & Grandes Negócios: contatos de 12/09/2021

Lula's government is concerned about Trump's tone but adopts caution and waits for practical actions

The qual emissora transmitirá o jogo do flamengo hojegovernment of President Luiz Inácio Lula da Silva is troubled by the actions and statements of U.S. President Donald Trump, particularly concerning key issues for Brazil, such as climate policy, the imposition of tariffs, and the bilateral relations between Brasília and Washington. But for now, the strategy is to exercise caution and wait to see what happens in practice, which includes the formation of the team under the new head of American diplomacy, Marco Rubio, approved on Monday as the U.S. Secretary of State. Governor of Pará: Helder Barbalho welcomes Trump's inauguration and expresses hope for his presence at COP30 'to discuss the future of the planet'Paris Agreement: New COP-30 president says Trump's decision has a 'significant impact' According to a source from the Palácio do Planalto, the Brazilian government wants to avoid any reaction that could be perceived as hostility at the beginning of Trump’s second term. An example of this was when the U.S. President stated that the country doesn’t need Brazil or Latin America. Instead of responding, Brazil’s diplomacy will step in to maintain the "most productive relationship possible." Seeking "Convergences" On Tuesday, Maria Laura Rocha, Secretary-General of Itamaraty, who is substituting for Foreign Minister Mauro Vieira while he is traveling abroad, stated that Trump can "say whatever he wants" and that diplomacy will work to find convergences, not divergences, in its relationship with the U.S. Her comment was made in response to a question about Trump’s statement that Brazil needs the United States more than "we need them." Also on Tuesday, after being announced as the president of COP30, Ambassador André Corrêa do Lago acknowledged that the U.S. withdrawal from the Paris Agreement will have a "significant impact." One of Brazil's tasks, as it prepares to host COP30 in Belém (PA) this November, will be to seek commitments from developed countries to allocate more resources for financing measures to combat global warming in poor and developing nations. In Lula’s administration, experts point out that there is a possibility that Brazil could rely on American governors willing to maintain measures to reduce global warming. However, there is concern that such actions might be limited, given the signals of support from the American business sector for Trump. Diplomats interviewed by O GLOBO argue that Trump’s messages are entirely aligned with his worldview, but it is necessary to wait and see what goes beyond political rhetoric. They highlight that Brazil is an important country, both economically and geopolitically, and hope for pragmatism in relations between Washington and Lula's government. BRICS Members of the Brazilian government stress that it is equally important to make it clear that Trump does not dictate Brazil’s foreign policy: Brazil will maintain its agenda as the BRICS chair, which includes initiatives like creating a local currency system aimed at reducing dependence on the dollar, despite threats from the U.S. President. There is a belief that agribusiness will be the least affected by the import tariffs announced by Trump. One reason is that Brazil's main exports to the U.S. are manufactured goods rather than agricultural products. Moreover, with the anticipated trade war with China, the Asian country is expected to purchase more food from Brazil, which competes with the U.S. in global markets. Additionally, the Lula administration expects American entrepreneurs with investments in Brazil to work toward preventing weakened relations through trade barriers. Another point is that the U.S. is among the largest investors in Brazil. Big Techs Trump also withdrew the U.S. from the global tax pact of the Organization for Economic Cooperation and Development (OECD), which Brazil has joined. There is concern that the agreement, which addresses multinational taxation, could become irrelevant with the withdrawal of the world's largest economy. However, government sources familiar with the matter downplay Trump’s decision, noting that the U.S. had never firmly committed to the pact. The agreement has two pillars. The first targets big tech companies and digital service providers with consolidated revenues of €20 billion and profit margins above 10%. The aim is for part of the profits of these giants to be taxed in the countries where they operate and where their consumers are based. The U.S. Congress had already been blocking effective U.S. participation. In this case, countries have individually created specific "digital taxes." In english: Read more stories on O GLOBO's website As for the second pillar, which addresses a minimum tax rate of 15% for multinationals, the U.S. government already has its own system, different from the OECD agreement. The threat of retaliation against countries taxing American multinationals is also not a game changer, as the U.S. minimum taxation system already serves this purpose. Brazil adjusted its local legislation to align with the minimum taxation of multinationals at the end of last year, and the assessment is that Trump’s stance does not affect this agenda. In fact, adherence to the second pillar is considered by the government as a way to protect against minimum taxation measures being adopted globally, whether multilaterally or unilaterally, as in the U.S. Executive orders signed by Trump are being analyzed. The topics addressed by Trump in his speech were expected, but interlocutors expressed significant concern about Trump’s messianic tone. His reference to "Manifest Destiny" (the belief that Americans were destined to expand westward from the Thirteen Colonies) was "very heavy," according to one ambassador’s assessment. The translation of this text into english was carried out by Project Irineu, O GLOBO's initiative to develop artificial intelligence tools. Here is the link to the original report. 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