Trade Wars Predicted by Brazil

Posted on January 10, 2011


Brazil’s finance minister has warned that the current currency manipulation would assuredly end in a trade war:

Guido Mantega … told the Financial Times that Brazil was preparing new measures to prevent further appreciation of its currency, the real, and would raise the issue of exchange-rate manipulation at the World Trade Organisation and other global bodies. He said the US and China were among the worst offenders.  [FT]]

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Mr Mantega said that Brazil’s trade with the US had slipped from an annual surplus of about $15bn (£9.6bn) in Brazil’s favour to a deficit of $6bn since the US began trying to reflate its economy through loose monetary policy.

He said China’s overvalued currency was also distorting world trade. “We have excellent trade relations with China … But there are some problems … Of course we would like to see a revaluation of the renminbi.”[FT]

Posted in: BRAZIL, WAR - TRADE