In its ongoing tariff dispute with the United States, Brazil has a trump card that could change the course of the entire global economy: its vast reserves of rare earth elements. These minerals are a group of 17 special metals that are needed in every high-tech machine today, be it electric cars, solar panels, mobile phones, jet engines or missile systems.
Brazil has the second largest reserves after China.
Brazil has the world’s second largest rare earth reserves after China. According to the US Geological Survey, China has reserves of about 44 million metric tons, while Brazil has reserves of about 21 million tons. This is why these minerals are called “geopolitical weapons,” because the country that controls them can have a significant impact on global supply chains.
Possible meeting between Trump and Lula
Tariff tensions between Brazil and the US have increased in recent months. US President Donald Trump has imposed a 50% tariff on some Brazilian exports. Trump accuses Brazil of “political vendetta” in the case against his right-wing ally Jair Bolsonaro.
A meeting between Trump and the Brazilian president is being considered during the upcoming ASEAN summit in Kuala Lumpur. Brazilian President Lula has said he is ready to discuss any issue with Trump, including Gaza, Ukraine, Russia, Venezuela and rare earth magnets.
Mineral sector opens “window of opportunity”
Brazil’s mining and energy minister, Alexandre Silveira, says growing mistrust between China and the US has opened a “huge window of opportunity” for his country. “New interests may now be aligned between Brazil’s mineral potential and U.S. investment,” he said. In fact, several American companies are already investing in rare earths projects in Brazil. However, these investments are currently mainly limited to mining. According to experts, Brazil should not limit itself to mining but should also move into advanced processes such as mineral separation and magnet manufacturing.
Partnership with China is also an option
According to an ET report, Brazilian rare earth expert Gilberto Fernandes de Ferrando believes that if Brazil wants to move faster in this sector, it should form a technological partnership with China. He said, “China has the most experience in this field.” Interestingly, China is already Brazil’s largest trading partner and is investing heavily in its automotive sector. Both the countries are also members of BRICS group, due to which this relationship is becoming deeper. However, if Brazil moves closer to China, the move could certainly anger the Trump administration.
Brazil at the crossroads of global strategy
Today, Brazil’s position is extremely strategic. On the one hand, there is the attraction of American capital and trade advantages, and on the other, China’s technological capabilities and investment strength. It will be difficult for the government to strike a balance between the two. Experts believe that Brazil’s strategic position is complex, but this is also its greatest strength.
