One year into the trade war staged by the U.S. and China, tensions have reached new levels with the world’s top 2 economic powers announcing new rounds of tariffs against each other. Animosity sparked up (again) on Friday, when the U.S. raised tariffs on USD 200 billion worth of Chinese goods from 10 to 25 percent. Beijing retaliated on Monday, raising import fees on American products. The increasing level of economic belligerence between the two behemoths sent shockwaves through global markets—and Brazil was no exception.
In times of uncertainty, riskier emerging markets take a bigger hit, with investors ducking for cover and taking their money to “safer” countries. As a result, the Brazilian stock market index crashed to a four-month low on Monday.