# Challenges in Brazil's Lula administration > Live situation record from CLSTR: https://clstr.news/situations/challenges-in-brazils-lula-administration > Updated: 2026-08-20T22:32:41.000Z. Sources: 33. Developments: 2. The administration of President Luiz Inácio Lula da Silva is navigating significant structural and developmental challenges. Reports from the Tribunal de Contas da União (TCU) indicate widespread delays in the Novo PAC program, with many public works in education and health remaining unfinished or unstarted due to planning and monitoring issues. The defense sector also faces delays regarding procurement for the Air Force and Navy, as well as gaps in artillery and drone contracts. In response to these administrative hurdles, President Lula has attributed much of the current difficulty to the previous administration, describing the state of the country upon his return to office as “totally unstructured.” To address long-term competitiveness, the government has announced a R$ 1.06 billion investment in high-performance computing and artificial intelligence. Diplomatic tensions have recently emerged regarding international trade and security. President Lula held an 80-minute telephone call with U.S. President Donald Trump to contest recent U.S. tariffs on Brazilian products, which include rates of 25% and 12.5% based on allegations involving deforestation, intellectual property, the Pix payment system, and forced labor. Lula described these claims as “infundadas” (unfounded). During the call, Trump proposed that technical teams meet to resume bilateral negotiations. The leaders also discussed security cooperation; while Lula expressed interest in combating organized crime, he rejected the U.S. classification of Brazilian factions, such as the PCC and Comando Vermelho, as terrorist organizations, asserting that Brazil has its own effective legal and financial tools to address these groups. Both leaders also discussed the conflicts in Ukraine and the Middle East, agreeing on the urgency of negotiated solutions. ## Claims - President Lula stated that the allegations justifying US tariffs on Brazil are unfounded. (corroborated by 19 sources) - The 80-minute phone call between Lula and Trump was described as friendly and cordial. (corroborated by 19 sources) - The US government cited deforestation, preferential agreements, intellectual property, corruption, the Pix system, ethanol, and forced labor as reasons for imposing tariffs on Brazil. (corroborated by 19 sources) - Donald Trump proposed that technical teams from both countries meet as soon as possible to resume trade negotiations. (corroborated by 18 sources) - Lula argued that Brazilian criminal factions should not be classified as terrorist organizations. (corroborated by 17 sources) ## Timeline ### 2026-08-20: Lula and Trump discuss trade tariffs and security in 80-minute call President Lula and Donald Trump held an 80-minute call to discuss US tariffs on Brazil, organized crime cooperation, and global conflicts, agreeing to resume technical trade negotiations. 33 sources. https://clstr.news/cluster/lula-criticizes-bolsonaro-administration-during-technology-announcement ### 2026-07-29: Brazil's Lula government faces delays in infrastructure and defense projects Brazil's Lula administration has stalled most Novo PAC infrastructure works and lacks key defence contracts, with the TCU flagging planning and budgeting shortfalls. 2 sources. https://clstr.news/cluster/brazils-lula-government-faces-delays-in-infrastructure-and-defense-projects --- Cite as: Challenges in Brazil's Lula administration. CLSTR, https://clstr.news/situations/challenges-in-brazils-lula-administration