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The Trump Effect: How The New Administration Will Impact Brazil

January 2, 2017

 

As an American with business in Brazil and one who is married to a Brazilian, I have spent over sixteen years living, visiting and working in this, the largest country in Latin America.   In fact, I am currently writing from the incredible Brazilian seaside as I enjoy the Christmas and New Year holiday with my wife’s family.

 

One day here, while driving with a close Brazilian friend who is of African descent and a former member of the Brazilian national congress with the liberal PT Party, our conversation moved to the topic of Donald Trump’s presidential election victory.  I was somewhat surprised by his comment regarding the future of Brazil under a Trump administration.  “Donald Trump will be good for Brazil,” he stated.  I asked him to explain. He went on to say that, he believed that the Trump administration would  not meddle in Brazilian internal affairs as occurred with the Obama administration and evidenced by publications of leaked US government communication documents. My friend’s feeling was that a Trump administration would allow Brazil to handle its own political and business issues without interference. As one who did media in support of President-Elect Trump and helped organize outreach events for the Trump for President Campaign, I was particularly interested in this perspective.  I soon came to learn that my friend was not the only one in this country with a positive opinion of the newly elected president of the United States.  In another very interesting conversation with my Uber driver, he discussed how he felt that Brazil needed its own “Donald Trump”.  He explained that the people of Brazil are fed up with professional politicians and that none of them was trustworthy.  In several other conversations with business executives, blue-collar workers and students, the need for a Brazilian Donald Trump was discussed.  Names such as business executive and newly elected Mayor of Sao Paulo, Joao Doria, controversial yet popular member of congress, Jair Bolsonaro and businessman and entertainer Roberto Justus, who was the host of The Apprentice TV show in Brazil, have been mentioned as potential Trump-like political candidates.

 

To give some context to these conversations, over the last three years Brazil has been going and continues to go through a gut wrenching time.  There is an ongoing investigation of a major scandal which prosecutors have labeled the” Lava Jato” or “Car Wash” corruption case. This scandal is about bribery and the paying for government contracts and involves both political and influential business leaders. Besides this, Brazil is dealing with a Presidential impeachment, serious crime and security issues, the outbreak of the Zika virus, and the devastating Samarco dam break disaster that sent contaminated mud flowing throughout a large portion of the country destroying land and polluting major water systems.

 

In spite of all this, because of their national pride and zeal to be self-sufficient, most Brazilians continued to work hard in support of their country.  During the period stretching from 2014 to 2016, Brazil managed to pull off a successful World Cup Soccer Championship and a spectacular first ever South American Olympics. Even as the local news provides daily updates on the “Lava Jato” scandals with images of former business and political leaders being led off to jail, the people continue to have faith that Brazil will survive this crisis and eventually thrive. Moreover, although with tighter budgets, Brazilians celebrated the Christmas and New Year’s holidays with hope and positive expectation.

 

There are, however, some glimmers of hope. Business sectors like agriculture, mining, banking, aviation and energy continue to grow and show promise. The internal market in Brazil is significant and sustainable and foreign investment, at lessor levels, continues to enter the country. Under a President Trump, Brazil’s position as a world leader in industries such as agribusiness, mining, banking, and aviation will be respected.  The Trump administration should recognize the significance of current Brazilian investment in the United States including the hundreds of millions of dollars invested in the US Treasury and direct US investments by major Brazilian companies like JBS, the largest meat producing company in the world, which employs 20,000 Americans.  The Trump administration should also take  note of other direct Brazilian investment in the US like  the new airplane manufacturing plant established in Tampa, Florida by Brazilian based aviation company Embraer and the investments by  Brazilians, like billionaire Jorge Paulo Lemann have invested in American companies like Anheuser Busch, Heinz, and Burger King. These business investments in the United States have created and expanded many thousands of American jobs.  President Trump is likely to be comfortable with Brazil engaging the US from this position of strength, which could help facilitate good trade and business negotiations, but Trump will likely expect Brazilians to handle their own internal issues and problems.

 

Moving forward, Brazil and the Trump administration have the potential to strengthen US-Brazilian political and business relations.  In a congratulatory call on December 13, Brazilian president Michel Temer stressed to President-Elect Trump that Brazil and the US have a good relationship that can get better.  He also discussed his desire for continued investments in both nations. Those who are looking towards the Brazilian  presidential election of 2018  should take into consideration the Trump administration’s priority  issues like government reform, security,  trade, and infrastructure development; all relevant issues for Brazil. Brazilian leaders will have the opportunity to review and take note of President Trump’s strategies to address these issues during his first year in office.

 

The door is open for Brazil to have a successful and mutually beneficial collaboration with the US under the new Trump administration.  The key for Brazil is to build upon and emphasize its strengths, and directly confront its weaknesses while effectively cleaning its own house.  

 

 

 

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