03/10/10 Stockholm, Sweden – According to the head of economic affairs at Brazil’s foreign ministry, Carlos Marcio Cozendey, the plan is “to distribute the retaliation broadly in order to maximise pressure.”
The “retaliation” he refers to includes trade sections on 100 US goods, ranging from cars to milk powder. The tariffs are in response to cotton producer subsidies the US has kept in place despite a 2008 WTO ruling that found the practice discriminatory.
From the BBC News:
“The World Trade Organization (WTO) approved the sanctions in a rare move.
“Brazil published a list of 100 US goods that would be subject to import tariffs in 30 days, unless the two governments reached a last-minute accord.
“It said it regretted the sanctions, but that eight years of litigation had failed to produce a result.
“It said it would raise tariffs on $591m (£393m) worth of US products – from cars, where the tariff will increase from 35% to 50%, to milk powder, which would see a 20% increase in the levy.
“Cotton and cotton products would be charged 100% import tariff, the highest on the list.”
As a rising economic force Brazil is taking a strong stance on the issue. It’s not insignificant to begin a trade confrontation the largest economy in the world. We’ll watch closely to see how this aggressiveness plays out.
Read more of the history behind the subsidies and about what the response means in the BBC’s coverage of Brazil’s US trade sanctions.
Best,
Rocky Vega,
The Daily Reckoning
Rocky Vega
Rocky Vega is publisher of Agora Financial International, where he advances the growth of Agora Financial publishing enterprises outside of the US. Previously, he was publisher of The Daily Reckoning, and founding publisher of both UrbanTurf and RFID Update -- which he ran from Brazil, Chile, and Puerto Rico -- as well as associate publisher of FierceFinance. Rocky has an honors MS from the Stockholm School of Economics and an honors BA from Harvard University, where he served on the board of directors for Let’s Go Publications, Harvard Student Agencies, and The Harvard Advocate.
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Good show. I’m betting on Brazil.
Like .99 cents is so much lower than $1.00. Pitiful
This is exactly as was predicted – the new great (or greater?) depression will eventually lead to trade wars and further damage to the international division of labour just as the last one did. And from here on it’s either state bankruptcy or an outright war to cover all past errors up.
Wow! a sad, sad situation. I’m reading this and I’m going,”How could something like this happen?” And then, near the end of the article I see where it’s been going on for eight years! WHAT!!!!???? It’s that damn moron ex-president’s shadow, still screwing stuff up! And you know, he had help. He ain’t smart enough to totally screw up the “Greatest Nation” on earth. I mean, total incompetents occasionally get something right. What an effed up mess!
Get rid of the black background. To hard to read for this 6th grade kid . Thanks much for listening !