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AL CIRCLE

US and Brazil edge toward tariff truce as both economies feel the heat

EDITED BY : 7MINS READ

The White House and Planalto Palace are inching toward détente after months of trade friction that has left industries on both sides bruised. A half-hour video call this week between US President Donald Trump and Brazilian President Luiz Inácio Lula da Silva opened the first door toward thawing relations since Washington hit tariffs on Brazilian imports this summer.

Image of Trump and LolaImage for representational purposes only (Source: AI Tool)

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Also read: EGA considers strategic takeover of Brazilian aluminium producer CBA

In Monday’s call, which has been described by both sides as “friendly and positive”, Lula persuaded Trump to roll back the 50 per cent tariff on Brazilian goods, calling for a return to the original 10 per cent level and the lifting of sanctions on certain Brazilian officials. “It was mostly focused on the economy and trade, between our two countries,” Trump posted later on Truth Social, adding that they would “get together in the not-too-distant future, both in Brazil and the United States.”

The conversation marked a striking change in tone after months of animosity. Relations froze when Trump raised tariffs in July, citing “developments concerning Brazil,” including the trial of former president Jair Bolsonaro, who was convicted of plotting a coup. Lula, in response, had accused Trump of “foreign interference” and behaving like an “emperor.” But Monday’s exchange suggested both leaders are looking for a path out of confrontation.

Brazil’s Vice-President Geraldo Alckmin described the call as “better than expected,” noting optimism for future talks. Lula has invited Trump to attend next month’s UN Climate Summit in Belém and proposed meetings at the ASEAN Summit in Malaysia or during a future visit to Washington.

A tariff war that cut deep

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