Brazil shifts toward China trade talks as US tariffs rise

Rising U.S. tariffs on Brazilian goods have prompted the Brazilian government to seek a closer commercial relationship with China. President Luiz Inácio Lula da Silva and Chinese President Xi Jinping discussed accelerating negotiations for a Mercosur‑China trade agreement, aiming to offset the impact of Washington's trade barriers. China already stands as Brazil's top trading partner, with bilateral trade reaching US$171 billion in 2025, exports of about US$100 billion and imports of US$70.9 billion, generating a surplus of US$29.1 billion.

At the same time, the Mercosur‑Singapore Free Trade Agreement, which entered into force for Brazil on 1 August, is delivering a suite of modernised trade rules for the Brazilian industrial sector. The Confederation of National Industry (CNI) highlights ten key benefits, including more predictable customs procedures, updated rules of origin, stronger industry protection, aligned sanitary standards, reduced technical barriers, a more favourable investment climate, expanded services market access, easier movement of business people, e‑commerce provisions and access to Singapore's government procurement market. Singapore was Brazil's sixth‑largest export destination in 2025 and the second‑largest in Asia after China.