📝 *Comment by Pedro Souza*

One month into his term in office, Trump has already managed to anger more people than he has pleased. But what is the logic behind this?

The US is such a power that it can produce everything from orange juice to rocket engines domestically. Trump's idea? To end the fragmentation of the global supply chain (offshoring) and bring everything in-house (nearshoring). To do this, he wants to impose tariffs and reduce imports.

📌 **The problem with this? We've seen this movie before...**

Back in the 1960s, in Brazil, a group of economists led by Celso Furtado believed that we could become self-sufficient. The "New Brazilian Economic Matrix" advocated import substitution, betting on the size of our consumer market to produce everything internally. The result? A disaster. The exchange rate soared, inflation exploded and the economy became less competitive.

🔎 **The reason is simple:**

When a country produces something, its goal will always be to maximize profit. To do this, it needs to sell at the highest possible price and produce at the lowest possible cost. But if you restrict the market to your own country, you lose global scale. Instead of focusing on the products in which you have an advantage, you end up trying to do everything — and, in the end, you do everything mediocrely and expensively.

Furthermore, by closing yourself off to trade, you devalue your currency, which in theory could stimulate exports. But there is one catch: other countries are not happy with this policy and start looking for alternative suppliers. In other words, the US will lose ground to countries like Bolivia, Egypt and South Africa. In the end, they will only be able to sell products that no one else can offer.

📉 **What will happen?**

The US economy may grow in the short term, but later it will face a weaker dollar and rising inflation. David Ricardo proved back in 1827 that global trade and specialization bring benefits to everyone. But it seems that 200 years later, they have forgotten this classic.

While the US isolates itself, China grows stronger. And take note: in the coming years, the American protectionist strategy will cost us dearly.

Stay tuned! The market is moving, and those who have *information are ahead*. 👊📊