LATAM Corporates: US-China Trade Dispute’s Potential Repercussions
Trade dispute between the US and China has continued to escalate and fears
of an eventual trade war has increased market volatility.
Steel and aluminum producers were directly affected by tariffs, but their ultimate impact may prove to
be muted (for LatAm issuers) by exemptions and LatAm steel producers with
significant US assets are in a more favorable position. Latin America could
benefit from product diversions resulting from US-China trade disputes, as long
as they don’t escalate to a full-blown trade war, which could lead to a global
economic slowdown. We look at the consequences for exports, foreign
exchange and inflation.
For instance, what is the impact on Brazilian beef and
pork producers from increased Chinese tariffs on US imports?