Brazil and the United States, the two largest economies in the Americas, appear to be on the cusp of a significant new trade agreement following a series of high-profile meetings between their leaders. Brazilian President Luiz Inacio Lula da Silva and U.S. President Donald Trump met on October 26, 2025, on the sidelines of the ASEAN summit in Kuala Lumpur, Malaysia, marking a turning point after months of strained relations and escalating tariffs that rattled international markets.
According to Reuters and the Associated Press, Lula announced that Trump had personally assured him of a forthcoming trade deal between the two countries. "He guaranteed to me that we will reach an agreement," Lula told reporters at a news conference, speaking through an interpreter. The Brazilian president described the encounter as a "very good meeting" and expressed optimism that a solution could be reached within days. "I am very confident that in a few days we will reach a solution," he added.
The stakes are high for both nations. The U.S. imposed a 50% tariff on Brazilian goods in July 2025, a move justified by the Trump administration as retaliation for the criminal prosecution and subsequent sentencing of former Brazilian President Jair Bolsonaro. Bolsonaro, a close Trump ally, was convicted of attempting a coup after losing his 2022 reelection bid and sentenced by Brazil’s Supreme Court to 27 years in prison. The U.S. government cited these events as an economic emergency, leading to the punitive tariffs that have since battered Brazil’s key export sectors—especially soy, meat, and minerals.
Lula, who just celebrated his 80th birthday while in Malaysia, has been adamant that Bolsonaro's case should not factor into trade negotiations. "Bolsonaro is part of the past now in Brazilian history," he stated, emphasizing that the former president had received a fair trial and that Brazil remains one of the few major economies with which the U.S. maintains a trade surplus. According to the U.S. Census Bureau, the U.S. held a $6.8 billion trade surplus with Brazil last year, a point Lula used to underscore the mutual benefits of renewed cooperation.
During their meeting, Lula presented Trump with a written document outlining his arguments against the U.S. tariff hikes. He acknowledged that the United States has the right to impose such measures but argued that the move was based on "mistaken information." Trump, for his part, did not commit to suspending the tariffs immediately, nor did he raise any conditions during the talks. Still, both leaders struck an optimistic tone. "I think we should be able to make some good deals for both countries," Trump said after the meeting, as reported by the Associated Press. On his way to Japan, Trump told reporters aboard Air Force One, "We’ll see what happens. They’d like to do a deal."
The prospect of a U.S.-Brazil trade agreement has significant implications beyond the two countries. As FRANCE 24 and AFP noted, an easing of tariffs would benefit Brazil’s export sectors by restoring market access and could also give the United States greater leverage in countering China’s growing influence in South America. Regional partners like Argentina and Venezuela are watching closely, aware that shifting dynamics between Washington and Brasília could ripple across Latin American geopolitics and trade flows.
Lula’s willingness to engage on broader regional issues also came to the fore during the summit. He offered to help mediate the ongoing crisis in Venezuela, where President Nicolás Maduro has accused the U.S. of fabricating a war threat after a U.S. warship approached Venezuelan waters. "I offered to help mediate the crisis in Venezuela," Lula confirmed, signaling Brazil’s potential diplomatic role alongside Washington in managing regional crises.
Brazilian officials echoed Lula’s optimism. Foreign Minister Mauro Vieira described the meeting as "very positive" and "very productive," noting that President Trump stated he would instruct his team to begin bilateral negotiations. Marcio Rosa, executive secretary for Brazil's foreign ministry, went even further, declaring, "We are making spectacular progress." Vieira also reported meeting with U.S. Treasury Secretary Scott Bessent, where both sides agreed to work towards a satisfactory agreement in the coming weeks.
Despite the upbeat mood, political challenges remain—especially for Lula at home. While Brazilian exporters stand to gain from reduced tariffs and renewed access to the U.S. market, there is pressure from domestic industries concerned about increased competition from American imports. The balancing act between opening Brazil’s economy and protecting local jobs will likely shape the final contours of any agreement.
For Trump, the negotiations offer an opportunity to recalibrate U.S. policy in Latin America. By easing tariffs and restoring trade ties, the administration can strengthen its economic foothold in the region and present itself as a reliable partner at a time when China’s trade and investment in South America are surging. Trump’s personal rapport with Lula—unexpected given their political differences—has been crucial in breaking the deadlock. Relations between the two leaders began to thaw after a brief meeting at the United Nations General Assembly in September, followed by a phone call in early October.
The sense of urgency is palpable. Trade negotiators from both countries are expected to begin technical talks soon, with a framework agreement possibly announced in early 2026. As Lula put it, "I'm convinced that in a few days we'll have a definitive solution, you know, between the United States and Brazil, so that life can continue well and happily."
For now, the world watches as two of the hemisphere’s most influential leaders attempt to turn a surprisingly good meeting into a breakthrough that could reshape trade, diplomacy, and power dynamics across the Americas. With both sides signaling optimism and negotiators preparing to work out the details, the coming weeks will reveal whether promises made in Kuala Lumpur translate into lasting change for millions on both sides of the equator.
