Overview
- Brazilian President Luiz Inácio Lula da Silva and U.S. President Donald Trump spoke by phone on Friday and agreed that technical delegations will resume talks to seek a negotiated resolution of the trade dispute.
- The United States has kept in place hefty new measures, including a reported 25% tariff on a range of Brazilian imports and a 12.5% tariff tied to forced-labor concerns, so any change will require further negotiation.
- Washington cited issues such as Amazon deforestation, Brazil’s PIX payments system, ethanol policy, corruption and alleged forced labor when imposing the levies, while Brasília calls those grounds unfounded.
- The two leaders also discussed security cooperation, with Lula rejecting U.S. moves to label Brazil’s largest drug gangs as terrorist organizations while offering to work with the United States on fighting organized crime.
- The call came the same day the U.S. announced a 90-day increase in a beef duty-free quota and could affect commodity flows and prices for exporters and U.S. consumers; markets and the coming technical talks are the key things to watch next.