The Donald Trump administration in the United States has imposed tariffs targeting certain countries, including China, Canada, Mexico, and the European Union (EU), and has also imposed reciprocal tariffs, provoking retaliatory measures from countries affected by the tariffs aimed at hundreds of U.S. products. In this situation, Brazil is aiming to take advantage of the indirect benefits. As a response to the tariffs imposed by Trump, Brazil is looking for opportunities to export its products to countries hesitant to import American products, while also working to increase its market share in the U.S., which is wary of imports from China. Notably, Brazil has maintained close ties with China since before Trump's potential re-election, capitalizing on the opportunity presented by the conflict between the U.S. and China triggered by the Trump-led trade war.
Brazil has shown closer ties with China in preparation for Trump's potential re-election. Chinese President Xi Jinping visited Brazil's capital, Brasília, as a state guest following the G20 summit held in Rio de Janeiro from Nov. 18 to 19 of last year, where he held a bilateral meeting with Brazilian President Luiz Inácio Lula da Silva at the Palácio da Alvorada (Presidential Residence).
China and Brazil have signed a total of 37 agreements across a wide range of sectors, including agriculture, mineral resources, trade and investment, infrastructure, finance, and science and technology, including the Belt and Road Initiative. During a press conference, President Xi emphasized that "the two countries are ready to be golden partners for each other's success" and that "we are at the best moment in history for the development of China-Brazil relations." President Lula also noted, "What China and Brazil do together will resonate globally."
The interests of China and Brazil are mutually complementary, making cooperation between the two countries possible. Brazil possesses raw materials such as beef, iron ore, and oil that China needs. Conversely, China has the capital necessary for the infrastructure Brazil aims to build. Reflecting this, after Trump imposed tariffs targeting China, and China retaliated with tariffs on U.S. agricultural products, Brazil turned to stockpiling soybeans for China. They have started to replace U.S. agricultural products with Brazilian goods. Brazil, capable of supplying nearly every item from cotton to chicken, is looking forward to the increased demand for imports from China. In fact, during Trump's first term, China purchased soybeans, grains, and beef from Brazil and other South American countries as a retaliation against the U.S. tariff war.
Since 2009, China has been Brazil's top trading partner, surpassing the United States. Since then, China has invested over $70 billion in South American countries, including Brazil, gaining favor with politicians and business leaders in the region. Currently, Chinese corporations control about 10% of Brazil's electricity supply. Many ports and roads in Brazil have also been constructed by Chinese corporations, and a railroad connecting the central, eastern, and northern ports of Brazil is currently under construction.
Brazil is also turning its attention to Japan. President Lula recently visited Japan and agreed with Prime Minister Shigeru Ishiba to open Brazilian beef imports. About 40% of the beef Japan currently imports is sourced from the United States. However, as Trump imposed tariffs on automobiles, there are analyses suggesting Japan could hold back on importing U.S. beef. Thus, Brazil is seeking to expand its beef exports to Japan.
At the same time, Brazil views the tariffs imposed by Trump as an opportunity to increase exports to the United States. For instance, the Brazilian Association of Industrial and Trade has expressed hopes that Brazil can export more shoes to the United States to replace Chinese products. Brazil sees itself as the largest shoe producer after Asia and believes it can substitute Chinese shoes that were previously imported by the U.S. Moreover, since the U.S. has recorded trade surpluses with Brazil, there is an expectation that the U.S. will not be reluctant to import more Brazilian products.