United States elections in 2024: waves of change reach the Brazilian market
In less than a year, the most decisive presidential election in shaping the international scenario will take place in the United States of America. So far (December 2023) everything indicates that the electoral college will feature the candidacy for the Primaries of current president Joe Biden (Democratic Party), former president Donald Trump (Republican Party), current Florida governor Ron DeSantis (Party Republican), former South Carolina governor Nikki Haley, businessman Vivek Ramaswamy (Republican Party) and late President John F Kennedy's nephew, Robert Kennedy Jr (Independent).
Parties and their trends
It is evident that each American government and its leader has unique visions and aspirations for the Brazilian market added to the government's global situation, of course. However, it is possible to observe different patterns between Democratic and Republican governments. The Democratic Party tends to defend international social agendas in its public speeches, in addition to adopting economic policies that tend towards State interventionism. Based on previous Democratic governments, the party demonstrates its greatest international concerns related to the defense of the democratic American model, international security, the environment and labor rights. Regarding Brazil specifically, Democrats have historically sought opportunities for cooperation in sectors of trade, energy, investment and Sustainable Development. The Republican Party is known for leaning towards economic policies that encourage free markets and promote bilateral international trade agreements. Removing trade barriers is a big issue within the party, causing disagreements among its members who seek to protect some American sectors.
Both parties generally recognize the importance of Brazil as a growing economy and a strategic partner in South America with the advancement of globalization and the greater immersion of the Brazilian market in blocs such as BRICS and Mercosur. It is necessary to emphasize that foreign policies are not completely uniform within any of the parties, and different groups within each party may have different positions.
How could this affect Brazil and its market?
The political developments decided in the November 2024 elections will directly affect Brazil and its exports. The candidates' intentions regarding international trade, bilateral and multilateral agreements, as well as their economic policies will shape global trade relations in the coming years. Given the uncertainties that the 2024 elections may bring, it is essential that Brazilian companies are prepared to adapt to new scenarios. This includes diversifying markets, strengthening competitiveness and continually assessing global conditions.
The decisions that will define American foreign trade policy with Brazil fall completely under the hands of the next president. By choosing to create new bilateral agreements or continue existing ones, Brazilian exports can be revolutionized, since a greater rapprochement with the USA added to Brazil's growing rapprochement with Russia, China and India will do wonders for the national trade balance, continuing the Brazilian surplus of 2023. Furthermore, a management that appears more stable and predictable to the globe, will promote a more convenient environment for countries to import Brazilian products, since unstable scenarios generate economic recession in a large part of global economies, especially in countries developing country, such as Brazil.
It is vital to highlight that the environmental priorities of the new management will be one of the biggest factors that will impact Brazil as it is a country in which agriculture represents almost 25% of its GDP. Therefore, sectors such as commodities and agribusiness may be subject to stricter environmental regulatory requirements from the USA. Furthermore, another factor with a major impact is monetary and tariff, as decisions to increase customs duties would make the export of products to American territory more expensive.
Isabela Molina Salin Rezende 12/12/2023