China remains Brazil’s top destination for exports while Chinese goods represent the most regularly important into Brazil. Furthermore, as soybeans are Brazil’s top export, it is clear that the South American nation’s exports have a special relationship with the Chinese market place. This is why the election of Jair Bolsonaro has created a measure of economic uncertainty. While Brazilian stocks are up on the news of a Bolsonaro victory , a Brazilian “trade war” with China would effectively destroy the domestic economy as Brazil’s economy is less diverse than the US and thus would be negatively effected by a trade war in far more noticeable ways.
During the campaign, Bolsonaro made anti-Chinese statements while his visit to Taiwan was seen as a direct provocation to the Chinese government and an act of defiance in terms of Brazil’s own adherence to the One China Policy. While his rhetoric on China softened in the weeks leading directly up to the election, the question that remains for Brazil as well as for countries like the United States is this: How can a leader present himself as pro-business while being anti-China?
The answer that the US Chamber of Commerce gave Donald Trump prior to his imposition of tariffs on China is that policies aimed at sowing hostility with China are in fact bad for national businesses. Putting his controversial domestic rhetoric to the side, Bolsonaro will now have to ask himself whether he truly is pro-business or whether he instead will govern on the basis of the anti-Chinese utterances that became common during his campaign. The fact of the matter is that he will soon have to decide. While even the most cursory understanding of Brazil’s trading needs would lead to a conclusion that Brazil should not only maintain but expand its trading ties with China, there are forces at play in Brazil’s new political reality that are far more serious than Bolsonaro’s controversial rhetoric.
Geopolitical expert Andrew Korybko has written the following on how Bolsonaro was more of an effect than a cause in respect of long term US meddling in Brazilian democracy:
“White House spokeswoman Sarah Sanders confirmed that the two spoke with one another shortly after the news broke that Bolsonaro trounced his opponent, noting that “both expressed a strong commitment to work side-by-side to improve the lives of the people of the United States and Brazil, and as regional leaders, of the Americas”, which could hint at a few prominent possibilities of cooperation between the two that will be described shortly. Reuters also reported that Bolsonaro promised to “realign Brazil with more advanced economies rather than regional allies” in the first public comments that he made after his victory was announced, suggesting that he might neglect his country’s membership in BRICS in favor of prioritizing relations with the US and EU instead. Returning to Sanders’ statement, it’s important to point out that she characterized Brazil as a regional leader of the Americas, which correlates with Trump’s vision for hegemonically managing Western Hemispheric affairs through the continuation of the Obama-era policy of “Leading from Behind” through regional proxy partnerships.
To elaborate, Trump’s predecessor quietly carried out regime changes in several Latin American countries and planted the seeds for what would later occur in Brazil, which was always the US’ ultimate prize because of its sheer size and influence. The current American President envisions the US working together with several regional partners, including Mexico, Colombia, and Brazil, to advance the goal of Washington-led hemispheric integration that would embed the US’ restored influence all throughout Latin America while squeezing out its prime Chinese competitor. To accomplish this, Bolsonaro-led Brazil will be encouraged to carry out the following geo-economic policies that will greatly enable the creation of a US-dominated “Fortress America” that Trump intends to build in response to China’s Eastern Hemispheric Silk Road connectivity gains of recent years”.
Korybko goes on to detail how the US seeks to use Brazil to form a large North-South America free trading zone that would naturally fall under the auspices of US trading regulations. Such a reality has already been partly revealed as implicit in the US-Mexico-Canada free trading agreement (aka NAFTA 2.0) is a clause mandating that both Mexico and Canada must consult with the United States and effectively ask permission before entering into new trading agreements with any country outside of North America. While this clause represents a degrading assault on the sovereignty of Mexico and Canada, for practical purposes the target of this clause is China, a nation that in recent years has developed an ever more intensely positive relationship with Mexico in particular.
For a nation like Brazil, a similar restriction that would likely be implicit in a western hemisphere wide neo-NAFTA would be incredibly damaging to the domestic economy. The worry therefore is not that the United States has such plans as the USMC trading agreement already demonstrates Washington’s clear anti-Chinese position when it comes to isolating fellow American nations from the benefits of the Belt and Road initiative. The more pressing matter therefore is whether Brazil’s President elect will listen to more experienced experts on trade or whether he will blindly follow Washington into a reality that will see Brazil’s agricultural and mineral industries lose their biggest export market.
For China’s own part, it will become increasingly beneficial for Beijing’s officials in Brazil to familiarise themselves with Jair Bolsonaro’s mindset so as to be able to grasp his own level of knowledge about trade, a subject that dominated his rise to national prominence far less than domestic issues of law and order. Beyond this, the world will have to wait and see if the self-described Brazilian nationalist will be more loyal to Brazilian exporters or to Washington’s dream of isolating the Americas as a whole from economic opportunities implicit in having healthy relations with China.