“President Trump Has Adopted–and Will Continue to Adopt–a More Radical Stance in His Second Term”

Christopher Garman's research focuses on topics related to macroeconomic management and its political impacts on emerging markets and comparative studies on national elections, with focus on Latin America. He also leads Eurasia Group's coverage of Brazil and is one of the world's leading political analysts with expertise in Brazil and Latin America. He serves as an advisor to Boards and Executive Committees of major multinational companies and financial institutions.  

Prior to joining Eurasia Group, Chris worked as a senior political analyst at Tendências Consultoria Integrada, a leading Brazilian economic consulting firm. He has held fellowships at the Instituto de Estudos Econômicos, Sociais e Políticos de São Paulo (IDESP), where he researched central bank politics in the region, and at the Centro de Estudos de Cultura Contemporânea (CEDEC), where he conducted field research on Brazilian federalism.

Christopher Garman is a regular commentator on geopolitics, politics and macroeconomics for CNN and major news channels in Brazil and Latin America. He is also a columnist for the newspaper Valor Econômico. He holds a master's degree in Political Science from the University of California, San Diego, and a bachelor's degree from Grinnell College. He is fluent in Portuguese and proficient in Spanish, and holds dual Brazilian and American citizenship.

The following is the interview given to CEBRI-Journal in April 2025.

Given that President Trump is serving his second and final term and is therefore free from electoral pressures, how do you assess the tone of his foreign policy decisions? Should we expect a more radical approach, or do you anticipate a shift toward greater pragmatism? 

Christopher Garman: President Trump has–and will continue to adopt–a more radical stance in his second term. But the reason goes far beyond the fact that he is free from electoral pressures as he is not eligible to run for another term.

It is important to remember that in Trump’s first term in office, he was surrounded by the establishment leadership of the Republican Party and senior stakeholders from the private sector. He was unprepared to assume office and lacked a cabinet of loyal appointees ready to support his agenda. As such, much of the story of his first mandate was about a President constrained by his cabinet, who balked at many of his policy preferences–such as leaving the North Atlantic Treaty Organization (NATO) and the North American Free Trade Agreement (NAFTA), more meaningfully raising tariffs, and gaining more control of the Panama Canal and Greenland.  

This time, Trump is more confident in himself, has chosen an extremely loyal set of advisors, and has a majority in Congress with a Republican party aware that its voting base is supporting the President. His second mandate is thus marked by Trump being less willing to be managed by his staff and more determined to rapidly push his policy preferences. This is a President who deeply believes in the use of tariffs to re-industrialize the country. 

We at Eurasia Group always felt institutional investors were underappreciating the push on tariffs for all the above reasons. But even we–who were more pessimistic about Trump’s outlook–were surprised by the magnitude of the announced tariffs on April 2nd. Although he has temporarily withdrawn several of them, these tariffs are expected to remain meaningfully high, particularly against China, consistent with his campaign pledges. While deals may be struck with various trading partners–particularly in Southeast Asia and partners like India, Japan and South Korea, additional tariffs targeting specific sectors seem imminent. 

The average effective tariff rate in the U.S. today, even with the pause on the reciprocal tariff rate, equals a level of protectionism only seen in 1910. The big story to track in coming months is the size of the economic blowback from these tariffs and whether the White House can partially reverse its decisions. Some claw back is likely, but we are seeing clear signs Trump is committed to these policies.

Big Tech companies and stakeholders have played a significant role in President Trump's political agenda since his first campaign. From your perspective in a high-profile consultancy firm, what risks does this evolving dynamic pose to both the United States and its global partners? 

CG: The more significant risk is probably the U.S.’s reputation as a trusted economic partner. To the extent Trump gives such a significant role to titans in the tech industry, notably Elon Musk, it certainly conveys the impression of a White House where direct access to the President has become equally, if not more critical, than rules-based decisions. 

That said, the tech sector's influence is not unconstrained. Trump had a contentious relationship with Big Tech companies during his first term. At the time, he accused social media platforms of silencing conservative voices. However, the landscape has shifted significantly in his second term. Technology leaders have rallied around the new President. The industry’s influence is no longer in the shadows. It is assertive, public, and, often, personal.

Under Trump 2.0, Big Techs want AI deregulation, fewer rules, and more lenient copyright laws. It is not clear, though, that the Trump agenda will lead to the windfall these businesses expect. These firms' political access in Washington has led to some early victories, such as the repeal of Biden-era executive orders and support against foreign regulations on content moderation and digital services taxes. 

However, the tariff wall being built around the U.S. and huge restrictions against China will negatively impact some of these companies. Retaliatory measures from other regions, particularly in Europe, that could include Big Tech companies' taxation, are risky. While the White House is sensitive to the pain points from trade protectionism–as made evident from the reprieve from reciprocal tariffs given to electronic goods like smartphones and computers–the industry is paying a price for the magnitude of the announced tariffs. It is important to remember that tech firms have built their business models on global access, free trade, and global talent mobility. All of this could be at risk. As such, it is not a coincidence that the April 2nd tariff round created a fissure between Elon Musk and the White House trade team. 

President Trump's nomination of Marco Rubio for Secretary of State was widely interpreted in Latin America as a signal of his regional approach. Based on your expertise in U.S.-Latin America relations, what role does Latin America currently play in U.S. foreign policy? 

CG: To be quite honest, it remains a very limited one outside of Mexico and Central America on the issue of migration. While Marco Rubio certainly understands Latin America like no other former Secretary of State, he will probably be focused on fighting fires elsewhere, and there is also the open question of how long Rubio will remain in his post. 

First of all, introducing a smaller reciprocal tariff–10% for most countries, except for Mexico and Venezuela at 15%, and Nicaragua at 18%–reflects not so much willingness to engage with the region but rather the calculations behind these decisions. The lack of time and capacity for a comprehensive examination of trade barriers country-by-country led to an over-reliance on trade balance data in determining the final tariff values. Consequently, most Latin American countries, which generally maintain a negative trade balance with the U.S., were in the lower range of tariffs.

Marco Rubio and other presidential advisors will certainly want to focus on placing restrictions on Chinese investments globally, and for South America it could be a point of friction for countries with large trading relationships with China. Mexico and Central American countries will surely give ground for greater restrictions on Chinese investments. They have little option but to pursue a strategy of access to the U.S. market. But for countries like Brazil, Chile, Peru, and maybe even Argentina, it will be hard to place such restrictions. 

The silver lining is twofold. First, the State Department will be more focused on negotiating with China, the European Union on Ukraine, and the Middle East. South America is low on the rank order of priorities. Second, there is an open contest between Marco Rubio as Secretary of State and Richard Grennel, the President’s special envoy, who is less hawkish on China. 

This means that China’s influence in the region and the Trump administration's response will pose a particular challenge for Brazil as it prepares to host the BRICS Summit in July. As Brasília navigates its BRICS presidency, it will need to exercise caution, as any biased statements from Lula could be received negatively by the Trump administration.

Some of the proposed trade measures under President Trump's second term could have significant implications for Latin America, Brazil, and other emerging economies, particularly in the area of tariffs. How might these policies affect U.S. trade relations with Latin America and Brazil if implemented as planned? 

CG: We should distinguish between the direct effects of tariffs on trade and investment flows, and the broader impact on the region resulting from global macroeconomic ripple effects. These ripple effects undeniably represent a significant shock to the global trade order and overall economic growth.

When it comes to the first channel, the outcome is more limited except for Mexico and Central America. The current implementation of 10% tariffs on much of Latin America will have a limited macroeconomic impact on the region–even if sectoral tariffs, such as the 25% tariff on steel, have a more significant effect in some countries like Brazil. This is mainly because most Latin American countries have smaller trade deficits with the U.S. and are not deeply integrated into global manufacturing supply chains. Aside from Mexico, which will face significant challenges, other countries in the region are unlikely to experience substantial economic repercussions from these tariffs.

The response to the tariffs and the U.S. relationship will also differ widely. Economically, Mexico and Central America are more vulnerable to Trump's trade and immigration policies, leaving them with little choice but to comply with the Trump administration's demands. In contrast, South American countries may increasingly seek to strengthen relations with the European Union, China and other regions. A push for the signing of the EU-Mercosur trade agreement is likely to happen in this context. 

However, the more significant impact for South America and countries like Brazil will come from the global macroeconomic spillovers from Trump’s policies. Much will depend on the severity of the global hit to growth. In a more “modest” version of Trump’s trade protectionism, the U.S. economy can enter a recession, the dollar will weaken, and countries in South America can suffer from a deflationary shock of weaker commodity prices, relatively stable currencies, and cheaper imports from Asia. This would mean slower growth but allow central bankers in the region to cut interest rates more easily. 

But if the global hit to growth is more significant and we enter into a “risk-off” environment globally, where Chinese growth drops more meaningfully and the government potentially devalues its currency, emerging market currencies and those in South America can depreciate. That would be the worst equilibrium–higher inflation with low growth. Much will depend on the severity of the global hit to growth.

President Trump has maintained a highly critical stance toward China since his first term. How do you assess U.S.-China relations in the short term? Do you foresee any significant impact on the BRICS bloc resulting from the ongoing U.S.-China rivalry?

CG: Tensions between China and the U.S. have sharply escalated over the past few weeks, with current tariffs at unsustainable levels. Both nations are inclined towards a deal to de-escalate the situation, but the problem is that both Washington and Beijing believe they have more leverage in the bilateral relationship.

Beijing’s view is that Trump’s policies are unsustainable and will collapse on its own weight. Washington’s vision is that China is more impacted by the trade war than the U.S. Some version of a deal is likely, but the average level of import duty on Chinese goods entering the U.S. will probably fall back down to the 60% to 50% range, which is quite a meaningful tariffs level (let’s remember that the average tariff rate for all Chinese imports before Trump assumed office was around 13%). However, even if a “modest” or partial rollback occurs, we are at a point where the U.S. and China are likely to accelerate efforts to decouple their economic ties.

In this context, the BRICS group becomes a particularly delicate matter. U.S. officials will closely watch the group's actions, especially for any indications of de-dollarization strategies, even if this does not mean advancing on a common currency plan–something Brazil has consistently insisted not to be on the agenda. 

Most of the original BRICS members–Brazil, South Africa, and India–have little appetite for turning the group into an anti-U.S. forum. However, maneuvers from China, given the heightened scrutiny, carry risk and could be poorly received in Washington. 

Interview granted through written medium on April 15, 2025. 

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