The Take: Why is drought-hit Brazil saying yes to AI data centers?
In this episode:
Lais Martins (@laismartins.com), Investigative Journalist
Episode credits:
This episode was produced by Marcos Bartolome and Haleema Shah, with Remas Alhawari, Manny Panaretos, Mariana Navarrete, and our guest host, Kevin Hirten. It was edited by Kylene Kiang.
The Take production team is Marcos Bartolome, Sonia Bhagat, Sari el-Khalili, Tamara Khandaker, Phillip Lanos, Chloe K Li, Ashish Malhotra, Haleema Shah, Khaled Soltan, Amy Walters, and Noor Wazwaz. Our editorial interns are Remas Alhawari, Marya Khan, and Kisaa Zehra. Our guest host is Kevin Hirten. Our engagement producers are Adam Abou-Gad and Vienna Maglio. Aya Elmileik is lead of audience engagement.
Our sound designer is Alex Roldan. Our video editors are Hisham Abu Salah and Mohannad al-Melhem. Alexandra Locke is The Take's executive producer. Ney Alvarez is Al Jazeera's head of audio.
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Al Jazeera
a day ago
- Al Jazeera
Trump says economic growth ‘shatters expectations'. Data says otherwise
The White House has launched an aggressive public relations campaign promoting a narrative of economic strength during the first six months of United States President Donald Trump, with claims of his policies fueling 'America's golden age'. But an Al Jazeera analysis of economic data shows the reality is more mixed. Trump's claims of his policies boosting the US economy suffered a blow on Friday when the latest jobs report revealed that the country had added a mere 73,000 jobs last month, well below the 115,000 forecasters had expected. The only additions were in the healthcare sector, which added 55,000 jobs, and the social services sector added 18,000. US employers also cut 62,075 jobs in July — up 29 percent from cuts in the month before, and 140 percent higher than this time last year, according to the firm Challenger, Gray and Christmas, which tracks monthly job cuts. Government, tech, and retail sectors are the industries that saw the biggest declines so far this year. It comes as this month's jobs and labour turnover report showed an economic slowdown. There were 7.4 million open jobs in the US, down from 7.7 million a month before. The Department of Labour on Friday released downward revisions to both the May and June jobs reports, significantly changing the picture the White House had previously painted. 'For the FOURTH month in a row, jobs numbers have beat market expectations with nearly 150,000 good jobs created in June,' the White House said in a July 3 release following the initial June report. The Labor Department had reported an addition of 147,000 jobs in June. On Friday, it sharply revised down that number to just 14,000. May's report also saw a big downgrade from 144,000 to only 19,000 jobs gained. Even before the revisions, June's report was the first to reflect early signs of economic strain tied to the administration's tariff threats, as it revealed that job growth was concentrated in areas such as state and local government and healthcare. Sectors more exposed to trade policy – including construction, wholesale trade, and manufacturing – were flat. Meanwhile, leisure and hospitality showed weak growth, even in peak summer, reflecting falling travel demand both at home and abroad. The administration also claimed that native-born workers accounted for all job gains since January. That assertion is misleading as it implies that no naturalised citizens or legally present foreign workers gained employment. However, it is true that employment among foreign-born workers has declined – by over half a million jobs – claims that native-born workers are replacing foreign-born labour, are not supported by the jobs data. Jobs lost in sectors with high foreign-born employment, including tech, have been abundant, driven by tariffs and automation, particularly AI. In fact, recent layoffs in tech have been explicitly attributed to AI advancements, not labour displacement by other groups. Companies including Recruit Holdings — the parent company of Indeed and Glassdoor, Axel Springer, IBM, Duolingo and others have already made headcount reductions directly attributed to AI advancements. Wage growth The pace of rise of wage growth, an indicator of economic success, has slowed in recent months. That is partly due to the Federal Reserve keeping interest rates steady in hopes of keeping inflation stable. According to the Bureau of Labor Statistics, wages have been outpacing inflation since 2023, after a period of declining real wages following the COVID pandemic. Wage growth ticked up by 0.3 percent in July from a month prior. Compared with this time last year, wage growth is 3.9 percent, according to Friday's Labor Department jobs report. Earlier this year, the White House painted a picture that wage growth differed between the era of former President Joe Biden and now under Trump because of policy. 'Blue-collar workers have seen real wages grow almost two percent in the first five months of President Trump's second term — a stark contrast from the negative wage growth seen during the first five months of the Biden Administration,' the White House said in a release. However, Biden and Trump inherited two very different economies when they took office. Biden has to deal with a massive global economic downturn driven by the onset of the COVID-19 pandemic. Trump, on the other hand, during his second term, inherited 'unquestionably the strongest economy' in more than two decades, per the Economic Policy Institute, particularly because of the US economy's rebound compared with peer nations. Inflation Inflation peaked in mid-2022 during Biden's term at 9 percent, before falling steadily because of the Federal Reserve's efforts to manage a soft landing. A July 21 White House statement claimed, 'Since President Trump took office, core inflation has tracked at just 2.1 percent.' On Wednesday, Treasury Secretary Scott Bessett said 'inflation is cooling' in a post on X. However, the Consumer Price Index report, which tracks core inflation – a measure that excludes the price of volatile items such as food and energy – was 2.9 percent in the most recent report and overall inflation was at 2.7 percent in June. Prices The most recent Consumer Price Index report, published July 15, shows that on a monthly basis, prices on all goods went up in June by 0.3 ,percent which is 2.7 percent higher from this time last year. Grocery prices in particular are up 2.4 percent from this time last year and 0.3 percent from the prior month. The cost of fruits and vegetables went up 0.9 percent, the price of coffee increased by 2.2 percent and the cost of beef went up 2 percent. New pending tariffs on Brazil, as Al Jazeera previously reported, could further drive up the cost of beef in the months to come. Trump has pointed to falling egg prices in particular as evidence of economic success, after Democrats attacked his administration over their price in March. He has even gone so far as to claim that prices are down by 400 percent. That figure is mathematically impossible – a 100 percent decrease would mean eggs are free. During the first few months of Trump's term egg prices surged, and then dropped due to an outbreak of, and then recovery from, a severe avian flue outbreak, which had been hindering supply – not because of any specific policy intervention. In January, when Trump took office egg prices were $4.95 per dozen as supply was constrained by the virus. By March, the average egg price was $6.23. But outbreak and high prices drove away consumers, allowing farmers with healthier flocks to catch up on the supply side. As a result, prices fell to an average of $3.38. That would be a 32 percent drop since the beginning of his term and a 46 percent drop from their peak price – far from the 400 percent Trump claimed. Trump also recently said petrol prices are at $1.98 per gallon ($0.52 per litre) in some states. He doubled down on that again on Wednesday. That is untrue. There is not a single state that has those petrol prices. According to Gasbuddy, a platform that helps consumers find the lowest prices on petrol, Mississippi at $2.70 a gallon ($0.71 per litre) has the cheapest gas, and the cheapest petrol station in that state is currently selling gas at $2.37 ($0.62 per litre). AAA, which tracks the average petrol price, has it at $3.15 per gallon ($0.83 per litre) nationwide, this is up from the end of January when it was $3.11 ($0.82 per litre). While petrol prices have gone down since Trump took office, they are nowhere close to the rate he has continually suggested. In July 2024, for instance, the average price for a gallon of petrol nationwide was $3.50 ($0.93 per litre). GDP On Wednesday, the White House said that 'President Trump has reduced America's reliance on foreign products, boosted investment in the US', citing the positive GDP data that had come out that morning. That is misleading. While the US economy grew at a 3 percent annualised rate in the second quarter, surpassing expectations, that was a combination of a rebound after a weak first quarter, a drop in imports – which boosted GDP, and a modest rise in consumer spending. The data beneath the headline showed that private sector investment fell sharply by 15.6 percent and inventories of goods and services declined by 3.2 percent, indicating a slowdown. Manufacturing The administration recently highlighted gains in industrial production, pointing to a boost in domestic manufacturing. Overall, there was a 0.3 percent increase in US industrial production in June. That was after stagnating for two months. There have been isolated gains, such as increases in aerospace and petroleum-related sectors—1.6 percent and 2.9 percent, respectively. But production of durable goods — items that are not necessarily for immediate consumption— remained flat, and auto manufacturing fell by 2.6 percent last month as tariffs dampened demand. Mining output also decreased by 0.3 percent. According to the Department of Commerce's gross domestic product report, manufacturing growth among non-durable goods has slowed. While there was a 1.3 percent increase, that's a decline from 2.3 percent in the previous quarter. This could change in the future, as several companies across a range of sectors have pledged to increase US production, including carmaker Hyundai and pharmaceutical giant AstraZeneca, which just pledged a $50bn investment over the next five years. Trade deals and tariffs In April, the White House replaced country-specific tariffs with a 10-percent blanket tariff while maintaining additional levies on steel, cars, and some other items. It then promised to deliver '90 trade deals in 90 days.' That benchmark was not met. By the deadline, only one loosely fleshed out deal — with the United Kingdom — had been announced. As of 113 days later, the US has announced comparable deals with just a handful more countries and the European Union. The EU deal still needs parliamentary approval. Contrary to the administration's claims, tariffs do not pressure foreign exporters — they are paid by US importers and ultimately are likely to be passed on to US consumers. Companies, including big box retailer Walmart and toymaker Mattel, have announced price hikes as a direct result. Ford, for example, raised prices on three Mexico-assembled models due to tariff pressures. To protect their own economies, many countries have pivoted their trade policies away from the US. Brazil and Mexico recently announced a new trade pact. The White House and its allies continue to defend tariffs by highlighting the increased revenue they bring to the federal government, which is true. Since Trump took office, the US has brought in more than $100bn in revenue, compared with $77bn in the entire fiscal year 2024. The price of imports for consumers has only risen about 3 percent, but many expect that will change as the import taxes are passed on to consumers. The White House did not respond to Al Jazeera's request for comment.
Al Jazeera
23-07-2025
- Al Jazeera
Trump's hefty tariff on Brazil expected to push the country towards China
When Brazilian President Luiz Inacio Lula da Silva was in China earlier this year for his third meeting with Xi Jinping since returning to office in 2023, he hailed the relationship between the two countries as 'indestructible'. That proximity will likely increase even more following United States President Donald Trump's announcement of a 50 percent tariff on Brazilian imported goods for overtly political reasons, experts say. 'The reality is that, today, the relation between Brazil and China is much more positive and promising than the one with the United States,' said Tulio Cariello, director of content and research at the Brazil-China Business Council (CEBC). Trump's pledge to inflict a 50-percent tariff on Brazil, due to come into effect on August 1, sent shockwaves throughout Brazil, especially since under the so-called 'Liberation Day' tariffs that Trump had announced on April 2, Brazilian imports would be taxed at 10 percent. That was also significantly less than percentages inflicted on other Brazilian competitors in the American market, prompting a sense of opportunity among businesses in South America's most populous country. Hence, the sudden decision of a 50-percent tariff was a rude shock, particularly for sectors that are big exporters to the US, such as aircraft, car parts, coffee and orange juice. The 50-percent tariff came on the heels of the BRICS summit in Rio de Janeiro, where leaders of developing nations raised 'serious concerns' about the increase of tariffs which it said were 'inconsistent with WTO [World Trade Organization] rules.' In a letter justifying the tariff, Trump directly tied the measure to former Brazilian President Jair Bolsonaro's current predicament, which he called a 'witch hunt'. Bolsonaro, often dubbed the 'Trump of the tropics', is facing trial for allegedly attempting to orchestrate a coup to remain in power despite his 2022 election loss to Lula. Trump also erroneously claimed a trade deficit with Brazil. Brazil has a deficit of about $7.4bn with the US, and a surplus of about $31bn with China. The political nature of the tariffs marked a sharp departure from Trump's usual rationale, drawing widespread condemnation across Brazil's political spectrum, and from China. 'Tariffs should not be a tool of coercion, intimidation, or interference,' a spokesperson for China's Ministry of Foreign Affairs said in the aftermath. By using tariffs for political leverage rather than economic reasons, Trump risks tarnishing the US's reputation as a reliable trade partner, experts say, making China appear more stable and predictable by comparison. 'China, to date, has shown no indication of backtracking on decisions or making sudden changes,' said Mauricio Weiss, an economics professor at the Federal University of Rio Grande do Sul. Strengthening Chinese ties The Asian country overtook the US as Brazil's biggest export market in 2009, and the two countries' trade and investment ties have only grown stronger since then. A notable signal of deepening ties came on Monday, when Brazil's Ministry of Finance announced plans to establish a tax advisory office in Beijing. Brazil only has four other such offices globally – three in South America and one in the US. 'The motivation is not politically driven, but rather justified by the growing importance of bilateral trade relations and the need to deepen cooperation on fiscal and customs matters,' Brazil's ministry said in a statement to Al Jazeera. China has sought to fuel its own domestic growth through access to natural resources and raw materials, such as oil, iron ore, copper, lithium and agricultural products. But since 2007, China has also invested more than $73bn in Brazil, according to CEBC. Much of those funds are pouring into strategic sectors such as energy, infrastructure, agribusiness and technology. 'The United States still invests more heavily in Brazil, but China's investments are more targeted and coordinated between governments,' said Weiss. Chinese products are also becoming increasingly common in Brazil. Electric cars made by Chinese manufacturer BYD are now a common sight, with seven out of 10 electric vehicles sold in Brazil coming from the company. Particularly symbolic of China's growing presence to the detriment of the US was BYD's purchase of a massive factory previously owned by Ford in Brazil's northeastern state of Bahia. The two countries have also agreed to explore transportation integration. Those plans include a bi-oceanic rail corridor linking Brazil to the Chinese-built port of Chancay in Peru. Xi's inauguration in November of the mega-port – where total investment is expected to top $3.5bn over the next decade – put China's regional influence on stark display. Other Latin American nations, including Peru, Colombia, and Chile, have also signalled their rapprochement with China, amid fears of Trump's intentions for the region. He has previously pledged to 'take back' the Panama Canal, including by force. But some have pointed out the deepening relation between China and Brazil does not mean the South American country will start exporting the goods it currently sends to the US to China, as the two countries buy very different products from Brazilian companies. 'Brazil isn't going to export manufactured products to China. That doesn't make much sense,' said Livio Ribeiro, a researcher at the Brazilian Institute of Economics at the Getulio Vargas Foundation. Even then, Chinese investments could play a crucial role in enabling Brazil to boost its industrial capacity and diversify its economy, according to Weiss. 'Simply being able to produce more of these products domestically and for other South American partners will already be a significant growth opportunity,' Weiss said. Speaking during a state visit in China in May, Lula said Brazil and China will be 'indispensable partners' because 'China needs Brazil and Brazil needs China.' 'Together, we can make the Global South respected in the world like never before,' Lula added.
Al Jazeera
21-07-2025
- Al Jazeera
In South Korea, Trump's tariff threats place US love affair under strain
Seoul, South Korea – When Sideny Sim had a chance to visit the United States on business several years ago, it was the fulfilment of a lifelong dream. Like many South Koreans, Sim had long admired the US as a cultural juggernaut and positive force in the world. These days, Sim, a 38-year-old engineer living near Seoul, feels no such love towards the country. As US President Donald Trump threatens to impose a 25 percent tariff on South Korea from August 1, Sim cannot help but feel betrayed. 'If they used to be a country that was known to be a leader in culture, the economy and the perception of being 'good,' I feel like the US is now a threat to geopolitical balance,' Sim told Al Jazeera. South Korea and the US share deep and enduring ties. South Korea is one of Washington's closest allies in Asia, hosting about 28,000 US troops as a bulwark against North Korea. The US is home to a larger South Korean diaspora than any other country. But with the return of Trump's 'America First' agenda to Washington, DC, those ties are coming under strain. In a Pew Research Center survey released earlier this month, 61 percent of South Koreans expressed a favourable view of the US, down from 77 percent in 2024. Like dozens of other US trading partners, South Korea is facing severe economic disruption if it cannot reach a trade deal with the Trump administration by the August deadline. The Asian country, which is a major producer of electronics, ships and cars, generates more than 40 percent of its gross domestic product (GDP) from exports. In addition to sending a letter to South Korean President Lee Jae-Myung outlining his tariff threats, Trump earlier this month also claimed that Seoul pays 'very little' to support the presence of US Forces Korea (USFK). Trump's comments reinforced speculation that he could demand that the South Korean government increase its national defence spending or contributions to the costs of the USFK. After Trump last week told reporters that South Korea 'wants to make a deal right now,' Seoul's top trade envoy said that an 'in-principle' agreement was possible by the deadline. With the clock ticking on a deal, the uncertainty created by Trump's trade policies has stirred resentment among many South Koreans. Kim Hyunju, a customer service agent working in Seoul, said that although her company would not be directly affected by the tariffs, Trump's trade salvoes did not seem fair. 'It would only be fair if they are OK with us raising our tariffs to the same level as well,' Kim told Al Jazeera, adding that the Trump administration's actions had caused her to feel animosity towards the US. 'I can't help but see the US as a powerful nation which fulfils its interests with money and sheer power plays,' Kim said. 'I've always thought of the US as a friendly ally that is special to us, especially in terms of national defence. I know it is good for us to maintain this friendly status, but I sort of lost faith when Trump also demanded a larger amount of money for the US military presence in our country.' Kim Chang-chul, an investment strategist in Seoul, expressed a more sanguine view of Trump's trade policies, even while acknowledging the harm they could do to South Korean businesses. 'The US tariff policy is a burden for our government and businesses, but the move really shows the depth of US decision-making and strategy,' Kim told Al Jazeera. 'Trump wants South Korea to be more involved in the US's energy ambitions in Alaska. It's part of the US pushing for geopolitical realignment and economic rebalancing.' Earlier this year, the US held talks with South Korean officials about boosting US exports of liquefied natural gas (LNG) to South Korea, a major LNG importer. Keum Hye-yoon, a researcher at the Korea Institute for International Economic Policy (KIEP), said it has been difficult for a US ally like South Korea to make sense of Trump's comments and actions. 'When Trump cites 'fairness' in his tariff policy, it's based on unilateral expectations of improving the US trade balance or restoring economic strength to certain industries,' Keum told Al Jazeera. 'As allies like South Korea share supply chains with the US and work closely with its companies, disregarding these structures and imposing high taxes will likely create burdens on US businesses and consumers as well.' While Trump's most severe tariffs have yet to come into effect, South Korean manufacturers have already reported some disruption. South Korea's exports dropped 2.2 percent in the first 20 days of July compared with a year earlier, according to preliminary data released by Korea Customs Service on Monday. Kim Sung-hyeok, the head of research at the Korean Confederation of Trade Unions (KCTU) Labour Institute, said exporters in the auto, steel, semiconductor and pharmaceutical sectors had been especially affected. 'As exports in these fields decreased considerably since the tariff announcements, production orders in domestic factories have declined,' Kim told Al Jazeera. 'Some automotive and steel production lines have closed temporarily, while other manufacturing sites have closed altogether. Voluntary resignations and redeployments have become rampant in some of these workplaces.' Kim said small companies may face the brunt of the tariffs as they are not capable of 'moving their manufacturing plants to the US', or 'diversifying their trade avenues outside of the US'. 'And as major companies face a general decline in exports, these small companies will consequently face a shortage in product delivery volume that will cause employment disputes,' he said. The Korea Development Institute estimated in May that the number of employed South Koreans would increase by just 90,000 this year, in part due to the economic uncertainties, compared with a rise of 160,000 last year. Even before Trump's arrival on the political scene, US-South Korea relations had gone through difficult periods in the past. In 2002, two South Korean middle-school girls were killed when they were struck by a US Army armoured vehicle. After the American soldiers involved in the incident were found not guilty of negligent homicide by a US military court, the country saw an explosion in anti-US sentiment and nationwide protests. In 2008, nationwide protests took place after the South Korean government decided to continue importing US beef despite concerns about the risk of Mad Cow Disease. More recently, President Lee, who was elected in June, has emphasised the importance of maintaining positive relations with China, Washington's biggest strategic rival and competitor. The KIEP's Keum said the US-South Korea relationship has evolved into a partnership where the US has become a 'conditional ally', where 'economic interests take precedence over traditional alliance'. 'The US is increasingly demanding South Korea to cooperate in its containment strategy of China among its other socioeconomic policies,' she said. Keum said that South Korea will need to seek out alternative markets and diversify its exports to mitigate the fallout of Trump's agenda. 'South Korea also doesn't need to act alone. The country can seek joint action with countries such as EU members, Japan and Canada to come up with joint responses to the current predicament,' she said.
