Donald Trump’s cuddles to President Luiz Inacio Lula da Silva (PT) will not be enough to reverse the tariff imposed by the American leader to most imported products in Brazil.
In a speech on Tuesday (23), Trump said he was briefly met with Lula behind the scenes of the UN General Assembly and who agreed to talk next week.
The US president added that he likes the Brazilian and only does business with people he likes. The contact had not been previously negotiated. The Planalto Palace considered direct communication impossible and was reluctant to start contacting the White House.
Eurasia Group consultancy, which specializes in global political risk analysis, assesses that Trump’s words make the call likely. However, the spontaneous nature of the comments does not guarantee a concrete result. A direct line between presidents can at least limit the potential to climb the conflict.
Despite diplomatic gestures, the economic scenario remains challenging. Analysts consulted by Gazeta do Povo They claim that the risk of setback remains high.
A simple meeting does not overthrow trade barriers that continue to be used as a political weapon. Trump often surprises the advisers themselves, often deviates from the official message and trusts personal instincts in bilateral negotiations. Often turns back to the commitments made at the moment.
The path to commercial normalization is long and uncertain. In order for Brazil to be able to be concrete benefits, it is essential to take advantage of the negotiation space with a firm posture and technical planning – not hope that diplomatic gestures will solve a tariff shock that affects the heart of the Brazilian economy.
The effects of US tariffs in Brazil: exports have fallen
The main difficulty in revealing the situation is the magnitude of the barriers imposed by the United States. In April, the Trump government began the commercial escalation by applying 10% tariff over Brazilian imports – a first blow that has already reduced national competitiveness.
The United States accounted for 11.7% of Brazilian exports between January and August, being the second largest commercial partner in the country, behind only China (29.5%). In absolute values, Brazil exported US $ 26.6 billion to Americans in the first eight months of the year, especially oil and derivatives, iron and steel, coffee, airplanes and orange juice.
The tension increased in July after the Federal Police operation against former President Jair Bolsonaro (PL), which resulted in house arrest decreed by the Supreme Federal Court (STF).
The episode shows how the crisis transcended the commercial scope. The US government rectulated in an unprecedented way: Secretary of State Marco Rubio announced the revocation of the visas of Minister Alexandre de Moraes (STF) and other members of the Court, justifying that Moraes drove a “witch hunt” against Bolsonaro.
Trump alleged attacks from Brazil to freedom of expression and human rights, directly mentioning the treatment given to Bolsonaro, his ally. Lula did not go back and even evaluated retaliation. “The world has changed, we don’t want an emperor,” said the petista.
The Americans then announced an additional 40% over most Brazilian products, adding to the 10% already in force. This combination left the country with total rates of 50% over much of its exports – the largest among all business partners in the largest global economy.
Some products such as commercial aircraft and their pieces, oil and derivatives, orange juice, iron and cellulose were included in the list of exceptions or had the tariffs zeroed.
US exports fall after tariff over Brazil
Despite the exceptions, in general Brazilian competitiveness in the American market has plummeted. Brazilian exports there fell to US $ 2.76 billion in August, a 18.6% drop compared to the same month of 2024. It was the lowest value for August since 2020 during the Covid-19 pandemic.
For the US to consider tariff reduction, aside the issue involving Bolsonaro’s conviction, Brazil would probably have to make significant concessions: cut its own tariffs on American products, commit to investments from US companies, put critical minerals on the table, and reduce US ethanol fares, currently by 18%.
Brazilian negotiators will hardly agree to widely reduce commercial barriers. The Lula Government would address cautious cautious mineral concessions, as it has repeatedly claimed that it will not create special rules for foreign countries to explore Brazilian resources.
In any case, the president said on Wednesday that he agrees to negotiate the issue of rare land with Trump, provided it is a “win-win” agreement and that does not limit Brazil to the role of mere “ore exporter”.
See also:
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Rare Lands: Why Haddad’s “card” against the tariff can fail
Commercial diversification: the response to the tariff and the search for new partners
Given this scenario, Brazil is accelerating strategies that were once long-term plans, turning them into urgent need. Eurasia Group points out that the country actively seeks to strengthen commercial ties with Europe, China, the Middle East, Mexico, Canada and the Association of Southeast Asia Nations (Asean).
Europe: top priority on Lula’s agenda
Negotiations with Europeans gained maximum priority. The Free Trade Agreement with EFTA (European Free Trade Association), which brings together Switzerland, Norway, Iceland and Liechtenstein, was signed in August. The next step is the agreement with the European Union.
This agreement is expected to be signed at the Mercosur summit, scheduled for November. The implementation is scheduled for 2027 and requires approval of 15 EU Member States on the European Council and simple majority in the European Parliament.
The European Union is the third largest commercial partner in Brazil. In 2024, bilateral trade moved $ 95.5 billion, the largest in history. Despite French opposition, Washington’s commercial pressure has transformed European negotiations of convenience into strategic need. The Brazilian government evaluates that trade with the EU could grow 6% per year after implementation.
Asia: Strategic potential in the face of tariff
Brazil also intensifies efforts with India, a market of 1.4 billion people – the largest democracy in the world and fifth largest global economy. This year, Lula and Indian Prime Minister Narendra Modi gathered twice and made three calls. Indian products are also subject to American tariffs that can reach 50%.
The two countries have joined the forces to expand the existing India-Mercosul agreement since 2009. Bilateral trade was $ 12.1 billion in 2024, far below the potential of the two emerging giants. Brazil plans to open commercial promotion office in India in 2025, although this partnership is considered risky due to the high Indian agricultural protectionism.
The relationship with China remains strategic but cautious. As Beijing reduces exposure to the US, it increases imports of Brazilian commodities that compete with US producers. China is Brazil’s main commercial partner. Brazil remains as China’s main agricultural supplier, accounting for 34% of soybean Chinese imports and 23% of beef purchases.
A free trade agreement with China is not on the agenda due to the pressure that Chinese industrialized products exert on the national industry. However, the investment of Chinese companies in Brazil grows as part of Beijing’s strategy to diversify global investments. According to the Brazil-China Business Council (CEBC), Chinese companies invested US $ 4.2 billion in Brazil in 2024, almost double compared to 2023. The main area was renewable energy.
Brazil also shows greater interest in ASEAN, block of 10 countries with 650 million inhabitants and combined GDP of US $ 3.6 trillion. At the end of March, the Brazilian President visited Vietnam, where he established agreements such as the opening of the market to Brazilian meat. Lula is scheduled to become the first Brazilian president to participate in the Asean summit in October 2025, after scheduled visits to Malaysia and Indonesia.
Americas: emerging opportunity
In the Americas, Brazil sees opportunities with Mexico and Canada, economies that total US $ 4 trillion in GDP. While the USMCA (AGREE US-MEXICAL-CANADA, which replaced NAFTA in 2020 and moves $ 760 billion per year) weakens under Trump management, Mexican and Canadian leaders sought Lula to explore commercial ties in South America.
The government of Canadian Prime Minister Mark Carnery signaled interest in resuming negotiations with Mercosur, paralyzed since 2021. Currently, Brazil’s exports to Mexico and Canada represent only 4.2% of the total, indicating enormous growth potential.
The market charges pragmatism: negotiations require caution
Trump’s gesture in New York does not mean that the problem has been solved. The Brazilian business community has received with moderate enthusiasm the news that presidents can talk after interaction in the UN, but signals that commercial diversification should continue regardless of the outcome.
Optimistic industry with the dialogue between Lula and Trump
The National Confederation of Industry (CNI) has seen Trump’s signaling a way for negotiations that can alleviate the impact of overflows. Ricardo Alban, president of the entity, expressed confidence that Brazil will be able to reverse this scenario through conversation and diplomacy. He recalled that “Brazil and the United States have had a business relationship for over 200 years – one of the longest partnerships in the Americas – and has complementary economies.”
CNI points out that the search for new markets should continue as a permanent, not emergency strategy. The entity expects the meeting to represent the opportunity for rapprochement to “reduce barriers, expand cooperation in innovation and sustainability, and reinforce legal certainty for investments.”
The American Chamber of Commerce (AMCHAM Brazil) also evaluates the decision as positive, hoping that the meeting will open the way for structured dialogue on economic and commercial topics.
The financial market shows cautious optimism, but points out that diversification is irreversible. Antonio Patrus, director of Bossa Invest, notes that rapprochement can make the way for strategic partnerships, “but Brazil can no longer lay all eggs in one basket.”
Conditions for success in reversing US tariffs to Brazil
For the negotiation to be successful, Brazil needs to go beyond emotional reaction. Volnei Eyng, CEO of Multiplike manager, says the country should face the situation with realism. “The government needs to negotiate pragmatically, seeking to reduce tariffs and strengthen long -term business relationship,” he says.
João Kepler, CEO of Equity Group, suggests that Brazil use the negotiating table not only to reduce tariffs, but to expand cooperation in innovation, sustainability and legal certainty. “If the government can guide the conversation at this level, the business community will have access to a more predictable market – an essential condition to attract long -term investments,” he explains.
For the long -term investor, discipline, consistent contributions and diversification ensure solidity in the face of political and economic cycles. Fábio Murad, economist and CEO of Super-ETF Education, argues that the possibility of negotiation changes the mood of the market, but “the lesson was learned.”
