Brazilian Corporations Focus on the USA – Trump Could Unintentionally Help

An emerging protectionism under the future President of the United States, Donald Trump, could paradoxically lead to an unexpected economic boom for two Brazilian companies. The two companies, steel manufacturer Gerdau and plastic producer Braskem, view their already substantial U.S. operations as a safeguard against the looming protectionist measures from the new U.S. administration. Trump has indicated that he may impose import tariffs of ten percent or more on all imported goods in order to eliminate the trade deficit. However, this could lead to a revenue boost for corporations like Gerdau, which already operates eleven production facilities in the United States and Canada. Rafael Japur, CFO of Gerdau, sees Trump's measures as potentially advantageous for the U.S. steel demand. Gerdau's shares experienced a significant rise following the election results, which further bolstered investor confidence. Analysts at the investment bank BTG Pactual pointed out that Gerdau is seen as a major beneficiary in the region, especially due to the expected changes in trade policy and potential tax cuts. Braskem could also benefit from Trump's protectionist plans. The petrochemical giant has five polypropylene plants in the U.S., which account for 15 to 20 percent of Braskem's revenues. CFO Pedro de Freitas emphasized the strategic role as a supplier for the American automotive industry. Both companies are urging Brazil to take countermeasures in the face of impending trade tensions. This could involve higher import tariffs on products from countries like China to protect the domestic market. Gerdau CEO Gustavo Werneck advocated for an increase in steel tariffs, while Braskem suggests similar strategies for the plastics market.