Why PIX became a pretext for the US in pricing Economist Paul Krugman, winner of the 2008 Nobel Prize in Economics, criticized the investigation opened by the United States government against Pix and stated that the offensive represents an attempt to punish Brazil for the success of the Brazilian instant payments system. ? In an article published this Monday (20), Krugman states that Pix has become a global reference in digital payments and that the Donald Trump government's initiative is not sustainable from an economic point of view. "Trump will try to punish Brazil for this success," wrote the economist when commenting on the trade investigation opened by the American administration based on Section 301 of the United States Trade Law. The American government included Pix among the subjects of the investigation into alleged Brazilian commercial practices considered unfair. Created by the Central Bank, the system allows instant transfers and payments between people and companies. New tariffs: USA says PIX harms American companies; financial sector in Brazil disagrees Jornal Nacional/ Reproduction For Krugman, offering a cheaper and more efficient public payment system does not constitute an unfair commercial practice. "Why would it be unfair for a country to offer its own citizens a better way to shop and pay bills?", he asks. Pix increased competition Throughout the article, the economist argues that Pix increased competition in the payments market by offering a low-cost alternative for consumers and companies. In his assessment, the popularization of the system reduced dependence on traditional means of payment and affected companies such as Visa and Mastercard. This, however, would be the result of competition between technologies, and not of an undue advantage. "Since when is it an unfair commercial practice for companies to lose market share to a competitor who offers a better and cheaper product?", he wrote. Krugman argues that the American government's reaction reflects, in part, the loss of space for private companies in the face of a public system considered more efficient. Paul Krugman had already defended Pix in an article written a year ago. Adam Schultz/Official White House Photo Debate goes beyond Pix Nobel uses the Brazilian case to defend public payment systems and digital currencies issued by central banks. According to him, the success of Pix demonstrates that this type of tool can make electronic payments cheaper and more efficient. The United States, he says, fell behind in this debate due to political resistance and pressure from groups linked to the cryptocurrency market. “Their real concern is that it works too well,” he wrote when commenting on opposition to the creation of a digital dollar. Krugman also compares the Brazilian case to El Salvador's experience with Bitcoin. For him, while Pix became widely used by the population, the Salvadoran government's attempt to transform cryptocurrency into a mass payment method failed. Tariffs will have limited scope, says In the final part of the article, Krugman assesses that the tariffs proposed by the Trump administration are unlikely to achieve the intended results. According to him, the measures could increase the prices of Brazilian products consumed by Americans themselves, such as coffee, beef and orange juice. At the same time, he states that Brazil tends to expand its presence in other markets. Krugman cites economist Monica de Bolle, a researcher at the Peterson Institute for International Economics, to argue that, on balance, American tariffs strengthened Brazil's position in international trade. "The diversion of global trade in reaction to US tariffs transformed Brazil into an exporting power," wrote De Bolle, cited by Krugman. As an example, she mentions the increase in Brazilian participation in soybean exports to China. At the conclusion of the article, Krugman makes a broader critique of the Trump administration's economic policy. “The Trump administration has declared war on the future,” he wrote. "And one thing we know about Trump is that he never admits when his chosen wars fail."