Canada Reacts to Trump with Tariffs and Intensifies Global Protectionism

Canada's decision to rigorously retaliate against trade barriers imposed by the United States marks a critical turning point in international economic policy, escalating protectionism and redesigning global supply chains. With a symmetrical 50% tariff projected to take effect on September 8, trade friction between the major North American economies imposes an immediate cost on the flow of goods and adds strong volatility to international industrial and agricultural commodity markets. This new focus of external instability directly impacts an environment where the exchange rate is already under pressure, with the Dollar (USD/BRL) quoted at R$ 5.16, registering a slight negative variation of 0.03% over a 7-day horizon and a 0.46% contraction over 30 days. Domestically and internationally, exchange rate rigidity contrasts with inflation and interest rate scenarios, highlighting how external shocks hit economies at different cycle phases. While 12-month accumulated IPCA stands at 4.44% — supporting a cooling trend compared to 4.64% 30 days ago —, the Selic rate remains parked at 14.00% per year, showing no significant oscillations. This rigidity acts as a technical buffer for foreign capital, but deepens corporate borrowing costs, making the business environment more sensitive to external shocks like the tariff war between northern neighbors.