Trump and Brazil’s Lula thaw relations after previous tariff disputes

President Donald Trump said he had a “very good” phone call with Brazilian President Luiz Inacio Lula da Silva on Monday, his first substantive conversation since the pair erupted over US tariffs and the impeachment trial of former President Jair Bolsonaro.

“We will have further discussions, and will meet in the not too distant future, either in Brazil or the United States,” Trump wrote in Social Truth. “I enjoyed the call – our countries will do well together!”

The stock market was marked by a thaw in what became one of the most contentious diplomatic relations in the Western Hemisphere. Since returning to office, Trump has often clashed with Lula’s leftist government over trade, energy policy, and treatment of Bolsonaro — a close Trump ally who modeled much of his political brand on the former US president.

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Earlier this year, Trump imposed a 40% tariff on Brazilian exports to the United States, hitting key sectors of the South American nation’s economy, including petroleum, soybeans, sugar, coffee, iron and steel. Brazil is also the third-largest foreign supplier to the United States, behind Australia and Canada—a trade flow that could be sharply curtailed if tariffs remain in place.

The measures, along with targeted sanctions on several Brazilian government officials, were framed by the White House as a response to what Trump aides called Bolsonaro’s “judicial persecution.” Brazil’s former president was convicted last month and sentenced to 27 years in prison for his role in a 2023 rebellion against Lula’s government — a ruling that polarized Brazil and condemnation from right-wing populist movements around the world.

Since returning to office, Trump has often clashed with Lula’s leftist government over trade, energy policy, and treatment of Bolsonaro — a close Trump ally who modeled much of his political brand on the former US president. (AP Photo/Eraldo Peres, File)

Trump and his advisers have publicly compared the prosecution of Bolsonaro to what they describe as politically motivated charges that Trump faced in the United States after the January 6, 2021, Capitol riot. In a June letter to Brazil’s government announcing the new tariffs, Trump wrote that “the way Brazil has treated…Bolsonaro, a leader highly respected around the world during his tenure, including in the United States, is an international disgrace.”

“This experience should not happen,” Trump added. “It is a witch hunt that must end immediately.”

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The tariffs, along with targeted sanctions on several Brazilian government officials, were framed by the White House as a response to what Trump aides called Bolsonaro’s “judicial persecution.” (AP Photo/Luis Nova)

The letter also confirmed that Trump had ordered U.S. Trade Representative Jamison Greer to launch an investigation under Section 301 of the Trade Act of 1974 into what the administration called “unfair and discriminatory practices” by the government of Brazil. These investigations have historically been a precursor to escalating tariffs or broader economic sanctions.

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Trump and Lula crossed paths briefly at the United Nations General Assembly in New York last month, where the two leaders shared an unexpectedly friendly handshake and a few words. “At least for 39 seconds, we had excellent chemistry,” Trump joked afterward, suggesting a possible renewed dialogue between the two largest democracies in the hemisphere.