Meeting between Lula and Trump could seal an agreement on rare earths and ease tariffs

The meeting between Luiz Inácio Lula da Silva (PT) and Donald Trump scheduled for this Sunday (26), in Kuala Lumpur, Malaysia, has the potential to redefine the commercial relationship between Brazil and the United States.

The main focus will be the search for an agreement on rare earths, a group of minerals essential for the production of advanced technologies and the target of an increasingly intense dispute between Washington and Beijing.

The bilateral meeting was organized after the escalation of tariffs imposed by the White House, which increased taxes on Brazilian products to 50%. The American government has signaled that cooperation in strategic areas, such as mining and clean energy, could open up space to reduce the surcharges applied since September.

Dispute between USA and China

Trump’s pressure on Brazil is linked to the attempt to reduce the United States’ dependence on China in the supply of critical minerals.

The Asian country has 90% of global refining capacity and almost absolute control over exports of these materials, used in the production of electric vehicles, semiconductors and military equipment.

Brazil, owner of the world’s second largest reserves, is emerging as a viable alternative to Chinese hegemony. According to the vice-president and minister of Industry, Geraldo Alckmin (PSB), the topic is already part of the dialogue between the two governments.

“The United States is interested in cooperating with us in the areas of energy, innovation and sustainability,” he stated in an interview with Record News.

Negotiation

Lula’s team has avoided linking the diplomatic crisis to the judicial process that led to the conviction of Jair Bolsonaro (PL), the declared reason for the increase in tariffs. Even so, members of the government admit that an agreement in the minerals sector could be the first step towards trade normalization.

Sources involved in the negotiations state that Planalto intends to propose investments in local processing and technological transfer, in order to reduce Brazil’s dependence on the gross export of these resources. The goal is to attract foreign capital without giving up control over strategic reserves.

Economic war

The movement comes as the dispute between the United States and China intensifies. At the beginning of the month, Beijing expanded restrictions on the export of rare minerals. In response, Trump threatened to impose additional 100% tariffs on Chinese goods starting in November.

The new round of tensions should be discussed at a meeting between the American leader and Chinese President Xi Jinping, scheduled for the 30th in Seoul.

While trying to contain the conflict, Washington is advancing bilateral agreements with countries that hold significant reserves. The first was signed with Australia, which occupies fourth place in the global ranking of rare earths. Brazil, just behind China, is seen as the natural next step in the American strategy.