From left to right: Donald Trump, Eduardo Bolsonaro, and Jair Bolsonaro

Good morning! Eduardo Bolsonaro, tipped to become Brazil’s ambassador to the U.S., meets Donald Trump. Brazil’s GDP numbers come better than expected—what does it mean for the economy in the long haul? (This newsletter is for platinum subscribers only. Become one now!)


Eduardo Bolsonaro to meet Donald Trump

Congress Eduardo Bolsonaro will meet with

U.S. President Donald Trump today in Washington, where they will reportedly discuss trade relations and Amazon preservation. The spike in Amazon fires has put Brazil at odds with some of the world&#8217;s biggest superpowers, such as France and Germany. Mr. Trump, whose administration has—similar to President Jair Bolsonaro&#8217;s—been marked by efforts to roll back environmental policies, was an outlier in siding with the Brazilian leader.</p> <div class="wp-block-image"><figure class="aligncenter"><img src="https://brazilian.report/wp-content/uploads/2019/08/Screen-Shot-2019-08-30-at-07.11.07.png" alt="donald trump twitter" class="wp-image-23151" srcset="https://brazilian.report/wp-content/uploads/2019/08/Screen-Shot-2019-08-30-at-07.11.07.png 625w, https://brazilian.report/wp-content/uploads/2019/08/Screen-Shot-2019-08-30-at-07.11.07-300x168.png 300w, https://brazilian.report/wp-content/uploads/2019/08/Screen-Shot-2019-08-30-at-07.11.07-610x343.png 610w" sizes="(max-width: 625px) 100vw, 625px" /><figcaption><a href="https://twitter.com/realDonaldTrump">@<strong>realDonaldTrump</strong></a></figcaption></figure></div> <p><strong>Why it matters.</strong> Mr. Bolsonaro&#8217;s son Eduardo is tipped to become Brazil&#8217;s ambassador to the U.S. and has started a reportedly warm relationship with the Trump clan. After meeting with the U.S. president in March, Eduardo Bolsonaro started to lobby hard for the approval of the AT&amp;T-Time Warner merger in Brazil—which goes against Brazil&#8217;s content production and distribution laws.</p> <p><strong>Embassy.</strong> President Bolsonaro has hesitated to formally name his son to the Washington embassy—fearing that the Senate may not approve the nomination. Today&#8217;s visit, alongside Foreign Minister Ernesto Araújo, could rub senators up the wrong way, giving the impression the government is bypassing the confirmation and having Eduardo Bolsonaro acting as a de facto diplomat.</p> <ul><li><strong><em>Go deeper:</em></strong><em> </em><a href="https://brazilian.report/power/2019/05/17/eduardo-bolsonaro-brazil-diplomacy/"><em>Eduardo Bolsonaro&#8217;s influence in Brazil&#8217;s foreign policy</em></a></li></ul> <hr class="wp-block-separator"/> <h2>Brazil&#8217;s GDP numbers better than expected</h2> <p>Above the government&#8217;s expectations, the Brazilian economy grew 0.4% over Q2 2019. It means that Brazil has escaped a technical recession—that is, two straight quarters of negative growth.&nbsp;</p> <div class="flourish-embed" data-src="visualisation/634032"></div><script src="https://public.flourish.studio/resources/embed.js"></script> <p><strong>In a nutshell:</strong> It was good, but &#8220;not enough to start the fireworks,&#8221; as Treasury Secretary Mansueto Almeida said. By the same token, it was bad, but not as dreadful as some economic indicators were suggesting.</p> <p><strong>Why it matters.</strong> Despite the rise of the GDP this past quarter, the Brazilian economy is now on the same level it was back in Q1 2012, and 4.8% below its highest pre-recession production level, in Q1 2014. As we showed in <a href="https://brazilian.report/newsletters/daily-briefing/2019/08/29/expect-brazil-gdp-numbers-q2-2019/">yesterday&#8217;s </a><strong><a href="https://brazilian.report/newsletters/daily-briefing/2019/08/29/expect-brazil-gdp-numbers-q2-2019/">Daily Briefing</a></strong>, this is the slowest recovery Brazil has ever had following a recession. A study by consultancy firm Austin Ratings placed Brazil as the third-worst performing economy in 2019 among 42 countries—with a growth expectation of 0.8%, only better than Germany (0.7%) and Italy (0.1%).</p> <p><strong>Drivers.</strong> The silver lining in GDP data is that the transformation industry sector showed signs of life, improving perspectives for the next few months (although growing uncertainty around the global scenario still calls for caution). The construction sector also improved, but that was mainly thanks to housing works—industrial, infrastructure, and logistics projects remain sluggish.</p> <p><strong>Deficit.</strong> Brazil&#8217;s government posted a BRL 6bn deficit in July. While negative, it is the best result for the month since 2014.</p> <hr class="wp-block-separator"/> <h2>Rondônia: over 6,000 fires</h2> <p>National parks and indigenous lands in the Northern state of Rondônia are still burning—even if Amazon fires overall have slowed down. The state, which historically has the highest deforestation rates in Brazil, experienced between January and August a 164% bump in the number of fires—amounting to 6,484. Authorities and indigenous leaders accuse landgrabbers of invading, deforesting, and burning down public lands. President Bolsonaro sent nine cabinet members to the Amazon region, in order to coordinate an effort against the blazes.</p> <p><strong>Why it matters.</strong> Amazon fires have led several countries to defend restrictions to Brazilian agricultural companies in their markets. France, Ireland, and Germany suggested that the Mercosur-EU could be conditioned to a shift in environmental controls, and Finland called for a boycott of Brazilian beef.&nbsp;</p> <p><strong>Boycott Brazil.</strong> VF Corporation, which controls 20 clothing brands, including Timberland, Vans, and The North Face, has confirmed it will no longer purchase leather from Brazil. The company said the restriction will be applied until it has &#8220;confidence that the materials in its products are not contributing to [Brazil&#8217;s] environmental degradation.&#8221;</p> <p><strong>Intervention. </strong>Olavo de Carvalho, a self-proclaimed philosopher who became the Bolsonaro clan&#8217;s political guru, defended a military occupation in the Amazon against foreign interference. Mr. Carvalho has proven to be highly influential in this administration, helping pick three cabinet members so far—and receiving from the president the highest medal awarded by the Brazilian government.</p> <hr class="wp-block-separator"/> <h2>What else you need to know today</h2> <p><strong>Brazil v. France.</strong> President Jair Bolsonaro was famous for snubbing the stylish Montblanc pens used by his predecessors (which cost more than the Brazilian minimum wage), and signing his decrees with a common Bic—a way to show he is a man of the people. But Bic is a French company, and after his public spats with Emmanuel Macron, Mr. Bolsonaro has dropped his Bics for Compactor pens, a Brazilian-made brand.</p> <p><strong>Prosecutor general.</strong> On September 17, Raquel Dodge&#8217;s two-year term as Brazil&#8217;s prosecutor general comes to an end—but President Bolsonaro has not yet named her replacement. Sources say the president will place Deputy Prosecutor General Alcides Martins as an interim replacement to &#8220;test&#8221; him. The prosecutor general is responsible for going after authorities, protecting minorities, and investigating environmental crimes.</p> <p><strong>2022 election.</strong> President Bolsonaro continued his attacks on possible adversaries he will face in his re-election effort, to happen in three years. After publishing that São Paulo Governor João Doria and TV presenter Luciano Huck bought luxury jets with low interest loans from public banks, he said on his weekly Facebook live that the two were very close to the government during the Workers&#8217; Party era. Mr. Bolsonaro&#8217;s polarization tactics have helped him keep his core supporters galvanized.

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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.