The Brazilian government is seeking a tariff agreement with the US that would prevent the White House from adopting the recommendation of the US Trade Representative (USTR), which suggests imposing an additional 25 percent tariff on some imports from Brazil.

The government believes it is possible, though difficult, to reach a compromise that is more advantageous for both countries than the 25 percent surcharge – because, among other reasons, the US has a trade surplus with Brazil.

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The USTR’s recommendation, announced last week, is the result of an investigation based on Section 301 of the US Trade Act. The argument used is that Brazil engages in “unfair” practices in trade relations.

Brazil countered that the claims are not valid and that the move stems from a bid to interfere in internal affairs and reflects Washington’s unilateral trade protectionism.

The government has been challenging the additional US tariffs, arguing that the average tariff applied by Brazil on US imports is 2.7 percent, which does not justify the claim that US companies would be disadvantaged in accessing the Brazilian market.

New deadline

Brazil is now working toward a July 15 deadline to reach a tariff agreement. That was the date set by the USTR for a decision on the matter. In theory, this deadline could still be extended.

As a result, Brazilian negotiators hope to gain more time, since the initial deadline set after the meeting between Presidents Luiz Inácio Lula da Silva and Donald Trump in Washington last month was 30 days, which ended on Sunday (Jun. 7).

Challenges

Among the challenges facing the negotiations is the fact that the US is involved in several other tariff talks around the world, in addition to the military conflict it is leading in the Middle East against Iran.

Meanwhile, the Brazilian government is assessing the advisability of a new meeting between Trump and Lula. The two may meet at the G7 summit in France from June 15 to 17. However, no bilateral meeting has been confirmed.

Another challenge in negotiating with the US is that Americans tend to have broad demands – multiple requests across different areas.

For now, Brazil is seeking an agreement specifically on tariff and trade issues, with other topics that might interest the Americans, such as rare earth metals, currently out of the picture. At the same time, the government states that Brazil’s popular instant payment system Pix is not part of any talks with Washington. The US insists that Pix harms US companies.

Slave labor

On the other hand, the additional 10 or 12.5 percent tariff imposed on 60 countries on the grounds that these nations do not effectively combat slave-like labor is viewed by the Brazilian government – which faces a 12.5 percent surcharge – as designed not to be negotiated.

Since this tax is imposed on much of the world, its primary aim is believed to be to reinstate, under new legal and argumentative grounds, the previous tariff that was overturned by the US Supreme Court.

In addition to Brazil, the new tariff affects Washington’s historic allies, such as Japan, the European Union, Canada, and India, as well as Argentina, led by Javier Milei, who has consistently sided with Donald Trump on international issues. It would raise the tax on some products sold to the US by 37.5 percent when added to the existing 25 percent tariff.

The US government’s decision to label Brazilian criminal factions CV (“Comando Vermelho”) and PCC (“Primeiro Comando da Capital”) as terrorist organizations took effect on Friday (Jun. 5), a move that could have economic and geopolitical consequences for the Latin American country. The measure had been announced on May 28.

The Brazilian government criticized the decision, arguing that it leaves room for Washington to interfere in internal affairs under the pretext of combating terrorism. According to a statement from the executive, the fight against crime should occur through international cooperation and with respect for the sovereignty of states over their territories.

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The government and experts also argue that the measure could harm the country’s economy, with repercussions for tourism, investment, foreign trade, and the financial system.

Shield of the Americas

The Trump administration has designated Mexican cartels and criminal organizations in countries such as Venezuela, Ecuador, and Colombia as terrorist groups.

In March this year, the White House formed a coalition called the Shield of the Americas, bringing together governments ideologically aligned with Trump to theoretically combat drug trafficking, but also to counter the economic influence of geopolitical adversaries such as China and Russia.

The fight against drug trafficking was the justification used to kidnap Venezuela’s then-President Nicolás Maduro as well as to pressure Mexico – a move denounced by Mexico’s current President Claudia Sheinbaum as foreign interference in internal affairs.

Brazilian President Luiz Inácio Lula da Silva stated Wednesday (Jun. 3) that Brazil will continue to seek new business partners to minimize the impacts of the trade policy adopted by the US. Lula chaired a ministerial meeting amid the announcement of new US tariffs on Brazilian products.

“We will seek out other partners. If they don’t want to buy, we’ll sell to whoever does. We won’t just sit around complaining. If they don’t want to invest here, we’ll look for someone else. Brazil is its own master. This is a democratic and sovereign country,” he told his cabinet ministers.

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On Monday (1), the US Trade Representative (USTR) proposed, among other measures, a 25 percent tariff on certain Brazilian goods imported by the US. The USTR report is the result of an investigation launched a year ago by President Trump’s administration into Brazil’s alleged “unfair trade practices” with the US.

Among other issues, to justify the measure, the agency accuses Brazil’s instant payment system Pix of “unfairly” harming US companies that provide electronic payment services – such as credit card operators MasterCard and Visa and WhatsApp Pay.

G7 summit

President Lula stated he will attend the G7 summit in June in France, which had not been part of his plans originally. The event brings together the leaders of Germany, Canada, the US, France, Italy, Japan, and the UK. Brazil will attend as a guest of the host, French President Emmanuel Macron.

“I wasn’t even going to the G7, but now I am. Someone needs to try to bring order to the house and stop this dismantling of multilateralism, democracy, and the devaluation of institutions. If the UN isn’t working today, we’re not going to fix the world by destroying the UN; we’re going to fix it by rebuilding the UN,” said Lula, reaffirming his support for strengthening the United Nations and reforming its Security Council.
 

On Tuesday (Jun. 2), China issued a statement supporting Brazil’s sovereignty, independence, and autonomy. According to the Chinese State Council, the country is willing to expand the cooperation it has maintained with Brazil and other Latin American countries

The Chinese statement in support of Brazil was made in Beijing during the China–Brazil Comprehensive Strategic Dialogue.

The ties between the two countries were reaffirmed amid threats from the US to impose a 25 percent tariff on Brazilian products not considered strategic for the US market.

Cooperation and sovereignty

According to Chinese Foreign Minister Wang Yi, China has always been a “reliable friend of the countries of Latin America and the Caribbean” and is “ready to work with countries in the region, including Brazil, to further deepen and expand overall cooperation between China and Latin America.”

He added that his country “supports Brazil in defending its national sovereignty, maintaining its independence and autonomy, and pursuing greater development.”

Joint efforts

Minister Wang called for Brazil and China to move forward in building a China–Brazil community in order to “jointly address various external challenges and generate greater synergy for the modernization processes of both countries and for the unity and strengthening of the countries of the Global South.”

He went on to say that both sides should advance exchanges and cooperation in areas such as culture, education, tourism, sports, subnational regions, youth, and the media.

Wang reiterated China’s position on strengthening communication and coordination within multilateral mechanisms, including the United Nations and BRICS. He also advocated for the implementation of global initiatives to promote the development of a “fairer and more equitable global governance system.”

Foreign minister

Brazilian Foreign Minister Mauro Vieira is in Beijing attending the assembly. He stated that Brazil shares China’s interest in expanding practical cooperation between the two countries.

He also said Brazil will continue to adhere to the “One China” principle. The term refers to China’s goal of reclaiming Taiwan, an island it considers a “rebel province.”