Brazil prepared for global trade war

[pampango]

Source: Macau News

Brazil has said there is likely to be a currency war, brought on by manipulation by China, the US and others. Finance minister Guido Mantega has stated Brazil will now prepare moves to raise the issue at the World Trade Organization and the G20 group of rich and developing countries.

Speaking to the Financial Times newspaper, he said a currency war had turned into a trade war, with Brazil’s trade with the US slipping from an annual surplus of about $15 billion to a deficit of $6 billion. He said the reason for the decline was due to US efforts to revive its economy through loose monetary policy.

The Brazilian real has increased by 39% against the US dollar in the last two years making Brazilian exports less competitive. The real has been going up steadily as Brazil’s economy has grown,

Mr Mantega added that China’s undervalued currency was also distorting world trade by its massive boost in exports.

Read more: http://www.macaunews.net/story/729920/ht/Brazil-prepared-for-global-trade-war

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I hadn't seen anyone link the US and China in terms of currency manipulation.

[jaybeat]

1. That's because they're comparing apples and kumquats

Our so-called "loose monetary policy" is nothing compared to what China does.

Given how much the US has outsourced the making of just about everything over the last 30 years, methinks Brazil doth protest a bit too much about a little stimulus. Especially since "little" is the operative word. And if the US economy doesn't turn around, US consumers aren't exactly going to be buying enough stuff from Brazil to fix the trade deficit.

But, in fairness, this is partly our own fault. We got them and the rest of the developing world addicted to an unsustainable "you build it, we'll buy it" trade model. Now they are at risk for being left high and dry as it falls apart.

[GETPLANING]

2. If you think China is growing, look at South America

Argentina, Brazil, Chile, Peru, and a few Central American countries, especially Colombia and Venezuela (yes, THAT Venezuela) are the fastest growing economies in the world. Brazil has had to take steps to cool the growth, using tax policy rather than monetary policy. The benefits have gone directly to the citizens rather than the bankers. Check out the charts for the national stock exchanges.

http://www.bloomberg.com/apps/quote?ticker=MERVAL:IND
http://www.bloomberg.com/apps/quote?ticker=IBOV:IND
http://www.bloomberg.com/apps/quote?ticker=IPSA:IND
http://www.bloomberg.com/apps/quote?ticker=IGBVL:IND
http://www.bloomberg.com/apps/quote?ticker=IBVC:IND
http://www.bloomberg.com/apps/quote?ticker=COLCAP:IND

In contrast, China, Asia, and India are a bit flatter--

http://www.bloomberg.com/apps/quote?ticker=HSI:IND
http://www.bloomberg.com/apps/quote?ticker=SHSZ300:IND
http://www.bloomberg.com/apps/quote?ticker=TWSE:IND
http://www.bloomberg.com/apps/quote?ticker=FSSTI:IND
http://www.bloomberg.com/apps/quote?ticker=SENSEX:IND

[conspirator]

6. What about Mexico? Is Mexico growing? I want to move there. n/t

[neovente]

3. global trade war???

What exactly does this entail and how would it affect Joe Public in the USA?

[bongbong]

4. Just another....

It's just another BRIC in the wall - the wall memorializing the end of America's economy.

[nalnn]

5. Brazil should not

While I agree that China and the US are manipulating their currencies unduly right now, I do not think a trade was would necessarily be the result. Brazil making the statements about a trade war like they have makes it sound to me that they would welcome it and would like to have a hand hand in starting one (a trade war that is). This does not bode well.

[unkachuck]

7. "...he said a currency war had turned into a trade war,..."

....well, something has to 'change' here in the US; someone or something has to begin creating the new jobs we desperately need....

"...China’s undervalued currency was also distorting world trade by its massive boost in exports."

....jobs, baby, jobs....an economic system that can't provide adequate employment for its people, is an economic system the people don't need....I'm sure Washington and Beijing are well aware of that....