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Bolsonaro and Trump to talk Venezuela, China

Today, U.S. President Donald Trump will meet Brazil’s Jair Bolsonaro—dubbed the “Trump of the Tropics”—for the very first time. The leaders of the Americas’ two largest democracies are expected to focus their meeting on the crisis in Venezuela and China’s creeping influence in Latin America. Aides from both sides, though, have downplayed the possibility of major breakthroughs during this visit.

During an event at the U.S. Chamber of Commerce, Mr. Bolsonaro said he is counting on the U.S. “to free Venezuela” from the anti-democratic rule of Nicolás Maduro. On China, Brazil has kept a more ambiguous position. While Mr. Bolsonaro and the ideological wing of his administration have been highly critical of Beijing, other groups in power defend a more cautious approach.

</p> <p>Economy Minister Paulo Guedes, for instance, reminded that China is Brazil’s top trading partner, and would be there to pick up the slack if the U.S. didn&#8217;t become more open to Brazilian exports. Brazilian officials have also confirmed that the Bolsonaro administration won&#8217;t—at least not for now—impose restrictions on Chinese telecom manufacturer Huawei. The U.S. has banned the company from use by public institutions and government contractors, claiming Beijing uses Huawei to steal data from other countries.</p> <ul> <li><strong>Go deeper:</strong> <a href="https://brazilian.report/power/2019/03/18/extremism-diplomacy-bolsonaro-washington/" target="_blank" rel="noopener noreferrer"><em>Balancing extremism and diplomacy: Mr. Bolsonaro in Washington</em></a></li> </ul> <p>&nbsp;</p> <p><a href="https://brazilian.report/power/2019/02/04/brazilian-government-newsletter/"><img class="alignnone size-large wp-image-14106" src="http://brazilian.report/wp-content/uploads/2019/02/unique-1024x576.png" alt="" width="1024" height="576" /></a></p> <h4>POWER</h4> <h2>Brazil more aligned to the U.S.<br /> <a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a><a id="2" name="2"></a></h2> <table class="mcnTextBlock" border="0" width="100%" cellspacing="0" cellpadding="0"> <tbody class="mcnTextBlockOuter"> <tr> <td class="mcnTextBlockInner" valign="top">In recent years, Brazil and the U.S. have exchanged barbs on the global stage. From different stands on trade, or on how to deal with Iran, all the way up to the NSA scandal which revealed that former Brazilian President Dilma Rousseff was being spied upon by the U.S. agency. Now, the Brazilian government promises things will be different. In President Bolsonaro&#8217;s first official visit to a foreign country, two decisions show his willingness to cozy up with the Americans.</p> <ul> <li><strong>Alcântara Base:</strong> The government signed a technology safeguards agreement—which had been previously agreed upon—to facilitate the launching of satellites equipped with American technology on Brazilian soil, principally from the Alcântara Launch Center. The base is close to the Equator and can save up to 30% of fuel needed for rockets, but had been underexplored due to a lack of a deal with the Americans.</li> </ul> <ul> <li><strong>Visas:</strong> Mr. Bolsonaro signed a decree eliminating visa requirements for tourists from the U.S., Canada, Australia, and Japan—enshrining a temporary policy used during the Rio 2016 Olympics. The Ministry of Tourism expects the inflow of travelers to rise, but analysts claim that violence and expensive plane tickets play a bigger role in keeping tourists away. The decree was unilateral, and Brazil didn&#8217;t get any concession in return. Meanwhile, the Trump administration has made visa rules for Brazilian tourists stricter.</li> </ul> <p><img class="alignnone size-large wp-image-14251" src="http://brazilian.report/wp-content/uploads/2019/03/7028523b-92e3-4e40-8ea2-9f65fb405bf7-1024x683.png" alt="" width="1024" height="683" /></p> <ul> <li><strong>Go deeper:</strong> <a href="https://brazilian.report/money/2019/03/18/visa-exemptions-tourism-brazil/" target="_blank" rel="noopener noreferrer"><em>Will visa exemptions really boost tourism in Brazil?</em></a></li> </ul> </td> </tr> </tbody> </table> <table class="mcnButtonBlock" border="0" width="100%" cellspacing="0" cellpadding="0"> <tbody class="mcnButtonBlockOuter"> <tr> <td class="mcnButtonBlockInner" align="left" valign="top"> <h4>MONEY</h4> </td> </tr> </tbody> </table> <table class="mcnTextBlock" border="0" width="100%" cellspacing="0" cellpadding="0"> <tbody class="mcnTextBlockOuter"> <tr> <td class="mcnTextBlockInner" valign="top"> <table class="mcnTextContentContainer" border="0" width="100%" cellspacing="0" cellpadding="0" align="left"> <tbody> <tr> <td class="mcnTextContent" valign="top"> <h2>Stock market reaches historic milestone—then loses steam<br /> <a id="3" name="3"></a></h2> <p>Ibovespa, the Brazilian benchmark stock market index, broke the 100,000-point mark for the first time in history during Monday&#8217;s trading. The milestone reflects the markets&#8217; continuous support for President Bolsonaro&#8217;s administration—and an adamant belief that he will be able to pass a meaningful pension reform.</p> <p>Even the world&#8217;s largest hedge fund, Bridgewater Associates, believes in the Brazilian economy. &#8220;Conditions are now in place to reignite the anemic recovery from a 2015-2016 recession: foreign debt levels are low, there is plenty room for real yields to fall and market pricing is too pessimistic,&#8221; Bridgewater said in a note to clients.</p> <p>The euphoria could be short-lived, though. The economy continues to underperform (investors have once again lowered their expectations for Brazil&#8217;s GDP) and Congress promises to be tough during negotiations around the pension reform. And while the 100,000-mark is a &#8220;psychological milestone,&#8221; it doesn&#8217;t mean that the volume traded in Brazil&#8217;s stock market is at a record level. In U.S. dollars, the Ibovespa index is currently at 26,370 points, almost 70% below the historical peak of 2008—due to a loss of value of the Brazilian Real.</p> <p><img class="alignnone size-large wp-image-14252" src="http://brazilian.report/wp-content/uploads/2019/03/3da9c0c2-3dd2-4c16-b1a1-6de2097063f1-1-1024x483.png" alt="" width="1024" height="483" /></p> <ul> <li><strong>Go deeper:</strong> <a href="https://brazilian.report/money/2019/01/01/bolsonaro-stock-market/" target="_blank" rel="noopener noreferrer"><em>How Brazil became the top stock market of 2018</em></a></li> </ul> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <table class="mcnButtonBlock" border="0" width="100%" cellspacing="0" cellpadding="0"> <tbody class="mcnButtonBlockOuter"> <tr> <td class="mcnButtonBlockInner" align="left" valign="top"> <table class="mcnButtonContentContainer" border="0" cellspacing="0" cellpadding="0"> <tbody> <tr> <td class="mcnButtonContent" align="center" valign="middle"> <h4><strong><a class="mcnButton " title="NOTEWORTHY" href="https://us16.admin.mailchimp.com/campaigns/preview-content-html?id=307011" target="_self" rel="noopener noreferrer">NOTEWORTHY</a></strong></h4> </td> </tr> </tbody> </table> </td> </tr> </tbody> </table> <p><strong><br /> Interest rates.</strong> Markets expect the Central Bank to keep Brazil&#8217;s Selic benchmark interest rates stable at 6.5%, in the first time the bank&#8217;s monetary policy committee meets under its <a href="https://brazilian.report/money/2019/03/13/roberto-campos-neto-central-bank/" target="_blank" rel="noopener noreferrer">new President Roberto Campos Neto</a>. He pledged to uphold the guidelines of his <a href="https://brazilian.report/money/2019/02/24/ilan-goldfajn-brazil-central-bank/" target="_blank" rel="noopener noreferrer">predecessor</a>towards the interest rate: “caution, serenity, and perseverance.” <a id="nw" name="nw"></a></p> <ul> <li><strong>Trade.</strong><strong> </strong>Starting today, free trade rules for auto parts and vehicles in Brazil and Mexico come into effect. Brazilian producers wanted to keep import quotas, claiming that Mexico&#8217;s industry is way more competitive, due to lower taxes, better infrastructure, and scale. The Brazilian government says that imports are far below the quotas threshold, and free trade rules will only have an effect after the economy takes off.</li> <li><strong>Telecom.</strong><strong> </strong>Mexico&#8217;s América Móvil has purchased Nextel&#8217;s Brazil operations for BRL 3.4bn—pending approval from regulators. The deal, however, is not enough for América Móvil&#8217;s telephony company Claro to claim the lead in the <a href="https://brazilian.report/money/2018/06/27/brazil-internet-smartphones/" target="_blank" rel="noopener noreferrer">mobile market</a>. Telefônica Vivo has a 31% market share, while Claro is second with 24%, and Nextel&#8217;s share of the pie amounts to just 1.4%.</li> <li><strong>Politics.</strong><strong> </strong>It is no secret that São Paulo Governor João Doria desires to become president. And as the current head of state, Jair Bolsonaro, has hesitated in going all-in on the pension reform, Mr. Doria has tried to position himself as the man behind the bill. While the president is in Washington, he met with the VP and asked allies to focus on the reform. Mr. Doria wants to be in a position to lure support from the business class, should it become <a href="https://brazilian.report/power/2018/10/31/business-elites-jair-bolsonaro/" target="_blank" rel="noopener noreferrer">disenchanted with the current administration</a>.</li> <li><strong>Dictatorship.</strong><strong> </strong>Until this day, many military academies in Brazil continue to <a href="https://brazilian.report/society/2017/10/15/brazil-dictatorship-streets/" target="_blank" rel="noopener noreferrer">celebrate the 1964 military coup</a>—calling it a &#8220;democratic revolution.&#8221; This year, though, with a president that openly supported the dictators and the use of torture, the Army&#8217;s top brass is concerned that if celebrations are too effusive, it would fuel political tension. &#8220;We expect some type of commemoration, but it should happen within [our] walls,&#8221; said VP (and retired general) Hamilton Mourão.</li> </ul> <p><span style="font-size: 1.7em;">

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BY Gustavo Ribeiro

An award-winning journalist with experience covering Brazilian politics and international affairs. His work has been featured across Brazilian and French media outlets.