Brazil’s President Luiz Inacio Lula da Silva announced an impending trade agreement with the U.S., following assurances from President Donald Trump.
Lula Cites Brazil's Strategic Role
President Lula, during a briefing at the ASEAN summit in Malaysia, revealed that Trump had ‘given his word “guaranteed” on a trade deal between the two nations, reported Reuters on Monday. Lula expressed confidence that the deal would be finalized “faster than anyone thinks.”
However, Lula described the recent U.S. actions against Brazil as “incorrect.”
He also expressed his willingness to engage in discussions with Trump on any issue and offered to assist the U.S. with the Venezuela situation. Lula emphasized the importance of considering Brazil’s experience as the largest and most economically significant country in South America.
This development follows a series of events that have strained U.S.-Brazil relations.
Coffee Price Surge Amid Brazil Tariffs
The recent development comes after a friendly call between President Lula and Trump, where Lula urged Trump to lift the tariffs and sanctions on Brazil. This was the first significant conversation between the two leaders since the U.S. imposed 50% tariffs in July.
Trump imposed tariffs on Brazilian imports, citing the trial of former President Jair Bolsonaro as one of the reasons behind the tariffs. Trump’s ideologically driven move to penalize the country for the imprisonment of “insurrectionists,” led to a shift in Brazil’s coffee exports to China. This has also resulted in higher prices for U.S. consumers. As per the Federal Reserve Bank of St. Louis, the average price of a pound of ground coffee hit $9.14 in September, a 3% rise from the August average of $8.87.
This move was criticized by economists, who argued it would harm American consumers without improving domestic supply chains. Economist Justin Wolfers. He criticized the idea of imposing tariffs on commodities such as copper and coffee, arguing they don't boost domestic production and are therefore "literally a tax on Americans."
As he put it, "We can’t import the mines from other countries. We can’t bring the coffee industry back to the United States — nowhere near enough."
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