US-Brazil Trade Relations Advance with Significant Tariff Reductions Following Lula-Trump Dialogue
Brazil and the US achieve tariff reductions on Brazilian exports after Lula and Trump’s recent meeting, marking progress in trade relations alongside diplomatic efforts.
- • US tariffs on Brazilian softwood and hardwood products dropped significantly, reducing export costs by $370 million.
- • The trade progress followed Lula and Trump’s talk at the UN General Assembly and involved a discreet negotiation approach.
- • Vice President Alckmin emphasizes cautious optimism amid US political sensitivities.
- • Lula and Trump plan another meeting to continue trade discussions, signaling ongoing diplomatic engagement.
Key details
Brazil's Vice President and Minister of Development, Industry, Commerce, and Services, Geraldo Alckmin, announced important progress in US-Brazil trade relations, highlighting a considerable reduction in US tariffs on Brazilian products following President Luiz Inácio Lula da Silva’s meeting with US President Donald Trump during the United Nations General Assembly in late September. Alckmin detailed that tariffs on softwood and hardwood products dropped sharply—from 50% to 10% and 25%, respectively—as well as tariffs on items such as cabinets and sofas falling from 50% to 25%. This drop in tariffs potentially excludes $370 million in Brazilian exports from previous duties, improving Brazil's competitiveness under the Section 232 of the US Trade Expansion Act, which imposes such tariffs uniformly across countries.
This diplomatic breakthrough reflects a strategic and discreet approach by Brazilian diplomats, who maintained open communication channels with the US despite previous resistance. The initial thaw in relations occurred at the UN, when Trump's positive remarks about Lula were seen as pivotal in unlocking dialogue with US advisors. Although optimism is high, officials like Alckmin stress cautious advancement considering the current US political climate. Alckmin also mentioned another forthcoming meeting between Lula and Trump, either virtually or in person, to further these trade discussions.
In addition to trade developments, Alckmin noted domestic economic progress connected to sustainability with the Carro Sustentável program, which incentivizes environmentally friendly vehicle sales, leading to a 28.2% rise in new car sales in Brazil. This program supports affordable, sustainable vehicles aligned with Brazil’s broader developmental goals.
The combination of tactful diplomacy and concrete tariff concessions underscores a promising period in US-Brazil economic and political relations, signaling a potential expansion of bilateral cooperation and trade.