U.S. eyes Brazil’s rare earths as Lula government pushes for talks

Finance Minister Fernando Haddad publicly reinforced the government’s strategy, advising business leaders to challenge the measure in U.S. courts in an effort to mitigate the impact of the unilateral decision. He also revealed that the contingency plan to be submitted to President Lula includes a range of proposals, including a credit line.

Mr. Haddad said more than 10,000 Brazilian companies could be harmed by the tariff hike, which is set to take effect on August 1. The government has tried to negotiate a solution—relying on backchannel communications through political and business intermediaries to appeal to Mr. Trump—but has received little response from the White House.

In light of the situation, the government is preparing a support package for affected Brazilian firms. Minister Haddad said a “menu of measures” is ready and will be presented to Mr. Lula next week. It will be up to the Brazilian president to decide which ones to implement and to what extent.

“This is a political decision that necessarily rests with him, given the sensitivity and importance of the issue,” Mr. Haddad said in an interview with Itatiaia radio. He declined to give further details, but confirmed the plan includes a credit line and measures “permitted under international law.”

On the investigations by U.S. authorities into Brazil’s Pix instant payment system, Mr. Haddad suggested the U.S. may be motivated by profit.

“Pix is now being accepted in Europe, in the U.S., in Argentina, at no cost to those countries. Who is that hurting? It’s hurting those who profit from financial transactions,” he said.

President Lula said Thursday that Mr. Trump has shown no interest in negotiating a way out of the trade conflict. In his view, if Mr. Trump truly wanted a resolution, he would have already made a phone call, which hasn’t happened.

President Lula said he is good at “playing cards” and warned that if Mr. Trump is bluffing, he’s ready to call it and double the challenge. “Brazil is used to negotiating,” he added during an event in Minas Gerais.

President Lula also demanded respect from the U.S. government and challenged Mr. Trump to explain “what his problem is” with Brazil, while warning that retaliation is on the table. “If the United States wants to negotiate, Lula is ready to negotiate. But I only take disrespect from Dona Lindu,” he added, referring to his late mother. He implied that American discomfort may stem from Brazil’s regulation of social media and the success of Pix.

Race for strategic minerals

In his speech, Mr. Lula also mentioned U.S. interest in Brazil’s strategic mineral resources.

“We have 12% of the world’s fresh water to protect. We have 215 million people to protect. We have all our oil to protect. All our gold to protect. All the rich minerals you want to protect. And no one touches them. This country belongs to the Brazilian people,” he said.

The remark was a response to reports that the U.S. chargé d’affaires in Brasília told representatives of the Brazilian Mining Institute (IBRAM) that the United States is interested in reaching agreements with the Brazilian government to secure access to so-called critical and strategic minerals such as lithium, niobium, and rare earths. In response, he was reportedly told that any such negotiations must be led by the federal government, not by private-sector executives.

Global competition for these strategic minerals, which are crucial for technological development and the energy transition, is at the heart of growing tensions between the United States and China. These resources are essential for sectors such as defense, telecommunications, and energy.

Vice President Geraldo Alckmin, who also serves as Minister of Development, Industry, Trade, and Services, said there is “a very long agenda to explore and advance” in ongoing talks with the U.S. when asked specifically about American interest in critical minerals.

“There are countless areas,” he said, referring to discussions he has had in recent days with representatives from several sectors, including mining.