“The worst European nightmare,” the Economist cover, with Donald Trump and Vladimir Putin sitting alone at a large trading table. Europe has some experience in the “nightmare” theme, having lived at least two of them in the last 120 years. If this is the worst, it doesn’t look very good.
Look, if we were debating a sharing of Brazil, I, who I only think of that baião of two and meat dried there from Alameda Tietê when I hear the word Tordesillas, would rather have a countryman at the table.
An eventual territorial division of Ukraine could have the positive effect of stopping war. Severe humanitarian issue and known social and economic benefits, synthesized in the “dividends of peace.” There is, however, in addition to disrespecting elementary principles of national sovereignty, potential aggression to all governance and defined post-45 borders.
Multilateralism, international treaties and supranational organizations give rise to an imposing bilateralism of the law of the strongest.
Although we can identify criticism pertinent to the slowness of the World Trade Organization (WTO), imbalances in the organization of the North Atlantic Treaty (NATO) and the protectionism disguised in Europe, a conservative would ask: let’s eliminate the construction of the last decades and put what in place?
If one of Trump’s goals is to bring Russia back to the world’s negotiating table, we will have to trust Putin or some autocrat who comes to succeed him, even knowing the ills of the local oligarchy, his levels of corruption and Relationship not always republican with the Orthodox Church?
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By isolating Ukraine and the European Union of negotiations, Trump elects Volodymyr Zelensky as the history dictator and attacks the historic transatlantic alliance. To some extent, all the Enlightenment heritage and the classic Western values, which even placed Australia as belonging to the Western block, are in check.
While running over multilateralism, Trump commites a vigorous domestic campaign against the deep state americano.
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Trump’s ambivalence
As a mark of its ambivalence, it carries with it the positive effects of reducing bureaucracy, decreasing transaction costs, improving the business environment by speeding up processes. At the same time, when it attacks the bureaucracy, technocracy and consecrated domestic institutions, Trump weakens the US state itself.
Francis Fukuyama, a professor of Stanford and famous for the proposition of “The End of History”, has devoted a series of articles in the series “Valuing Deep State”To basically demonstrate how a state of high capacity, professional, impressive is crucial to the success of any society.
As Martin Wolf wrote, “Anyone who has worked in the area of economic development, like me, knows that without a neutral, competent and professional public service, nothing in society really works. The more complex and refined a modern society and economy if It makes it more true. ”
Wolf goes further: “The goal would be to transform the US into a plebiscite dictatorship, in which the power holder is King.” To reform the problematic US bureaucratic system, we would replace it with ideologically aligned people, confident of the president.
It is the essence of liberal democracy, the empire of law, of moral and legal equality, which would be at stake. For more fierce critics, we would be coming to a new stage of capitalism, in fact a technoFudalism – any resemblance to ideas defended by Elon Musk’s grandfather in his technocratic sect may not be a mere coincidence.
In a recent article in Brazil Journal, Marcos Troyjo joked with an unlikely meeting between Milton Friedman and Raul Prebisch to describe the combination, on the one hand, of an internal environment of deregulated and bureaucratic business, and, on the other, a policy of replacement of imports.
Given the insurgency against the deep state in the US, I risk another picturesque meeting, between Alexis Tocqueville and Sérgio Buarque de Holanda. “Democracy in America” would find “The Roots of Brazil”, with respect for the rule, American instrumentalism and its pragmatism finding “the cordial man”.
If ties of trust and personal proximity start to import more than the consecrated institutions, the merit gives way to the personal bond. The rule matters less than affectivity and personality.
Thus, meritocracy, efficiency, respect for institutions are losing space. And what’s up?
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Signs of the new times?
The first effective signs of the new times are already echoing in the formation of expectation of economic agents.
The trade uncertainty index (Trade Policy Uncertaintyderived from automated text research in the electronic files of seven newspapers) hit 323.75 points, the largest level in the historical series.
In the capital market, after a long Wall Street leadership, European scholarships have a notably more prominent appreciation in 2025. Most European stock rates risen more than 10% this year, against a much more moderate increase in variable income. -American.
Classic research with managers of the most recent Bank of America Merrill Lynch (BOFA) has pointed out a significant increase in the expectation of higher performance of global actions against those in the US.
Commenting on the moderate right victory in Germany, Banco Société Générale has identified a new positive chapter for European markets. Michael Hartnett, also from Bofa, has synthesized the new moment of global capital flows in replacing the acronym “aiai” (all-in on artificial intelligence) para BIG (bonds, internationalfrom the American perspective, and gold).
Since the catalysis of the Deepseek event, the crack in the environment involving Mag7 in the US to use Nassim Taleb’s expression, the capital flows previously drained by Nvidia and the like are now intended for other places. What was a large vacuum cleaner of global liquidity in recent years now acts at the other end, providing resources.
All this happens at a time when the US conjuncture emits erratic and ambiguous signals. PMI Preliminary Compound from S&P Global for the US, which accompanies the manufacturing and services sectors, fell to 50.4. This was the lowest reading since September 2023 and fell short of the 52.7 recorded in January.
In parallel, consumer confidence recorded a fall far beyond expected, while long -term inflation expectations were deteriorated.
As I like to remember Ray Dalio, the decades often have alternation of good relative performances between regions and asset classes.
All Wall Street exceptionalism seen in recent years may finally be giving way to a rally from Europe, China and other emerging markets.
In Brazil, the consensus also points to only one technical adjustment, a “climb in the void”, without a major change of fundamentals, a mere cyclical recovery.
A few have already begun to change their minds, seeing a little more than a small rally within a large bear market. When the idea of a more structural movement becomes predominant, it may be too late to buy.
