Trade war fears bypass Lat Am

The escalating rhetoric over trade protectionism has largely bypassed the economies of Latin America. Indeed, the focus on US actions on steel and aluminium, as well as alleged intellectual property abuses by China, has distracted from more hopeful news on Nafta talks. Local reports suggest that the US is now considering dropping its insistence on a domestic content requirement in autos, which would remove a significant barrier in the negotiations. We’re still some way from an agreement, but the prospects do at least look better than at any time over the past few months. Meanwhile, the impact of the steel and aluminium tariffs themselves will be limited, not least because Brazil, Mexico and Argentina have been granted temporary exemptions. The economies of Latin America – like all EMs – would be among the biggest losers in the event of escalation and the eventual rollback of globalisation. But the various measures announced over the past few weeks fall well short of what some of the more fiery rhetoric on trade might otherwise suggest.