Bargaining element: Brazil will offer its rare earths to the United States in exchange for tariff relief

Brazil may offer the United States access to its reserves of rare earth metals in exchange for the abolition of American trade duties, experts from the republic are convinced. In their opinion, the leaders of the two countries are likely to raise this issue during the next meeting on October 26. For the first time since the inauguration of the head of the White House, Donald Trump and Luiz Inacio Lula da Silva will hold face-to-face talks in Kuala Lumpur, where they will attend the ASEAN summit. Brazil has faced 50% tariffs when shipping its goods to the American market for political reasons. And the offer to cooperate in the field of rare earth mining — and the Latin American state is in second place in terms of reserves — may turn out to be Lula da Silva's trump card. However, the Russian Federation is also ready to cooperate with the republic in this area, Alexey Likhachev, Director General of the Rosatom State Corporation, told Izvestia.

What will Lula and Trump discuss at the Kuala Lumpur meeting?

For the first time since his inauguration, Donald Trump will hold full—fledged talks with Luis Inacio Lula da Silva - they are scheduled for October 26 in Kuala Lumpur, where both presidents will attend the ASEAN summit. The meeting, which has been preparing for almost two months, will be an important step towards bringing together the positions of politicians whose relations can hardly be called partnership.

Brazil, for which the United States is an important trade destination, faced duties of 50% on shipments of its goods to the North American country in August. Among the political reasons are the case against ex-President Jair Bolsonaro, lobbying for the creation of an alternative currency to the dollar within the framework of the BRICS, support for the regime of Nicolas Maduro in Venezuela and the lifting of the economic blockade on Cuba. The tariff policy is likely to be the subject of negotiations in Malaysia, Brazilian experts are convinced.

— Lula has repeatedly stated that he is not going to discuss political issues with Trump, especially those related to the rule of law in Brazil. Trump, in turn, has demonstrated that he is ready to waive duties only if certain concessions are received. Therefore, I believe that access to rare earth metals can be discussed, as it is a strategic asset needed by the United States in the face of growing technological competition with China," Guilherme Casaroens, associate professor at Florida International University, told Izvestia.

Brazil's reserves of rare earth metals (which the United States needs, among other things, for the production of military equipment — Tomahawk missiles, Predator drones and F-35 fighter jets) are estimated at 21 million tons. In July of this year, the Brazilian municipality of Minazu became the first place outside Asia to produce four rare earth metals on a commercial scale.

Brazil ranks second after China in terms of rare earth reserves, with Beijing controlling about 90% of the world's REM processing capacity. Nevertheless, their purchase in China became more difficult for the United States after the start of the trade war, which Washington unleashed. The republic's authorities have recently introduced strict controls on the export of technologies related to the extraction and processing of rare earth metals. In this regard, Brazil is seen as a potential replacement for China.

— In July, the United States officially informed the Brazilian government of its interest in the country's rare earth reserves. Having such a large amount of resources could put Brazil at the center of the geopolitical struggle between China and the United States for control over them. Brazil has the scientific potential to explore these reserves, but it does not yet have the necessary technologies for this, and there is no industry capable of processing and refining these minerals. Therefore, Brazil can agree to American investments in this region," said Ana Livia Esteves, PhD, lecturer at the Faculty of World Economy and World Politics at the Higher School of Economics.

Brazilian laws allow foreign companies to participate in the development of rare earth metals, so the offer to American entrepreneurs to enter this niche will be one of the potential trump cards that Lula uses in negotiations with Trump, the expert continued.

At the same time, political differences are likely not to be discussed at the leaders' meeting, says Ana Livia Estevez. By the way, during Trump's last call with Lula, the name of Jair Bolsonaro, who was sentenced to 27 years for an attempted military coup, was not mentioned even once during the half-hour conversation. Although it was the eccentric ex-president of Brazil that the American leader saw as his like-minded friend and invited him to the inauguration. Trump even ordered the visas of the judges who handled the Bolsonaro case, as well as some of their relatives, to be reset.

The effect of U.S. tariffs on the Brazilian economy

At the same time, it is worth noting that Russia is also interested in cooperation with Brazil— a BRICS partner, in this area.

"There is such a story (possible joint extraction of rare earths from Russia and Brazil. The Brazilian Mining minister initiated this discussion. There are different estimates of Brazil's potential in terms of rare earth metals and uranium deposits, among others. The work is being carried out at the initial level," Alexey Likhachev, head of Rosatom State Corporation, explained earlier in an interview with Izvestia.

According to him, it is extremely convenient for the state corporation to organize joint projects with the current leadership of Brazil. Issues related to mining are among the top issues of Rosatom State Corporation's work with this country, Likhachev said.

Brazil in this case will not have to choose between a partnership with the United States and Russia. At the same time, it is important to keep in mind that the United States has always been considered one of the main partners for the South American country. And the possible severance of ties with the United States, which had matured after the return of Donald Trump to the White House, caused concern among the Brazilian authorities. But in the end, the American actions did not have such a strong effect. Moreover, the Americans themselves felt the negative impact.

In 2024, the United States accounted for 12% of Brazilian exports and 15.5% of imports, and the figure increased significantly last year. By November 2024, the South American state was ranked 18th among American exporters and ninth among importers of products from the United States. In the first half of 2025, Brazil imported $34.3 billion worth of goods from the United States and exported $29.2 billion.

With the introduction of tariffs, Brazilian coffee exports to the United States decreased by 70%, which led to a sharp increase in prices, since the United States imported a third of all purchased grains from the South American state — 1.5 million tons of the product arrived from Brazil last year. American consumers have also noticed the increased cost of orange juice and beef.

At the same time, Brazil itself has managed to reorient exports of its products to other markets. In particular, shipments to Singapore increased by 133.1% and to India by 124.1% in September. Sales of Brazilian goods to Latin American markets increased by 30%, largely due to Argentina, and shipments to the EU increased by 2%.

— It is thanks to Brazil's good relations with the countries of the Global South, in particular with the BRICS, that the impact of the duties imposed by Trump against Brazil turned out to be much less than expected. Brazil has managed to redirect its American exports to other markets. The truth is that the United States will gradually lose its importance as a consumer market for Brazilian products," says Ana Livia Estevez.

In general, Brazilians have not been directly affected by Trump's tariffs, Guilherme Casaroens emphasizes. Nevertheless, the duties still have an impact on the number of jobs in the country.

— Some key agricultural and manufacturing sectors, such as coffee, beef, steel, and auto parts, are experiencing difficulties. Tariffs can affect employment and, ultimately, domestic prices," the expert said.

One of the reasons why Trump may change his position on Brazil is due to the fact that the US economy is suffering from his own actions.

It is noteworthy that Brazil itself initiated the mechanism for responding to Donald Trump's duties. In July, the country's authorities adopted a law on economic reciprocity. It defines how the State can respond to unilateral measures taken by countries or economic blocs that negatively affect Brazil's international competitiveness. Later, the Latin American country convened an extraordinary summit of BRICS leaders in the VKS format, with Brasilia chairing the association in 2025, to discuss a potential response. But in fact, no measures have been taken against the United States.