WASHINGTON, May 7 (Reuters) – President Luiz Inácio Lula da Silva will visit the White House this Thursday with the aim of reviving what US President Donald Trump last year called ‘excellent chemistry’ between the two leaders, hoping to avoid new tariffs and demonstrate a willingness to negotiate agreements on critical minerals and organized crime, three people from the Brazilian government told Reuters.
“We don’t know if the visit will help,” a Brazilian official involved in organizing the meeting told Reuters. “But it has a better chance than if we did nothing.”
Last year, Trump imposed 50% tariffs on Brazilian products, among the highest rates applied to exports from other countries, accusing Brazil of promoting political persecution against former president Jair Bolsonaro, who was later convicted of an attempted coup d’état.
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Trump later removed most tariffs, including those on beef and coffee, at least in part to help contain rising food prices in the US. In February, the U.S. Supreme Court struck down tariffs he had imposed under a national emergency law, eliminating many of the remaining tariffs.
Brazilian products are still subject to an additional 10% tariff, which expires in July. However, in recent weeks, Brazil has seen signs that its exports could be hit by new tariffs related to a Section 301 investigation into unfair trade practices.
Tensions also persist over digital trade — as Brazil blocked the US-backed renewal of the World Trade Organization (WTO) tariff moratorium on e-commerce — and high Brazilian tariffs on some products, including ethanol.
Last month, the Office of the US Trade Representative also claimed that nearly half of Brazil’s timber exports come from illegal sources – which the Lula government denies, arguing that it has reduced deforestation rates to historically low levels.
Brazilian officials expressed concern about the possibility of a new wave of tariffs during a meeting two weeks ago with representatives from the US Department of Commerce. According to people present at the negotiations, US representatives asked few questions, reinforcing the perception that the investigation was aimed at justifying tariffs rather than resolving trade issues.
“What they are doing is creating a basis, even if false, to justify a subsequent adoption of tariffs,” said a second Brazilian official.
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CRITICAL MINERALS AND ORGANIZED CRIME
The thaw in relations between Lula and Trump began last September at the UN General Assembly, when Trump made the ‘chemistry’ comment, acknowledging in part Brazil’s vast reserves of critical minerals, said Monica de Bolle, a Brazilian economist and senior researcher at the Peterson Institute for International Economics.
The Trump administration’s desire to build a supply chain of rare earths needed for high-tech manufacturing will likely keep Lula and Trump’s meeting in order, she said.
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‘On the US side, they are seeking some kind of agreement – whatever it is – on critical minerals and rare earths with Brazil,’ De Bolle said. ‘The US really needs something from Lula.’
The Lula government does not expect an agreement on critical minerals to materialize, people close to the president told Reuters, because authorities are still finding it difficult to reach consensus on even a basic memorandum of understanding.
There are also tensions over the White House’s efforts to designate criminal groups in Latin America as terrorists.
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The Lula government is trying to avoid such a measure in relation to the PCC and Comando Vermelho, as this could pave the way for US military action in Brazil or sanctions against banks that unknowingly do business with members of these criminal groups.
Such a decision could have “reflections on the Brazilian economy, the productive sector and the financial system,” the head of the Federal Police, Andrei Rodrigues, told Reuters in March.
Instead, Lula will propose greater cooperation in combating organized crime, money laundering and arms trafficking.
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‘I don’t believe it will be possible to sign anything because we sent the counter-proposal a short time ago, and I don’t think they have had time to process it,’ said an official who worked on drafting the document.
