# Mercosur-China trade talks amid US tariffs > Live situation record from CLSTR: https://clstr.news/situations/mercosur-china-trade-negotiations > Updated: 2026-08-25T00:25:53.000Z. Sources: 25. Developments: 5. In early July 2026 President Lula used the Mercosur summit in Asunción to reaffirm the bloc’s ambition for a trade agreement with China, pledging a US$100 million contribution to the Fund for Structural Convergence of Mercosur to finance infrastructure in Paraguay and Uruguay. Experts warned that high production costs, needed reforms and competition from Chinese industry made a near‑term deal unlikely. Later that month Lula’s hour‑long conversation with President Xi highlighted accelerated negotiations and cooperation in artificial‑intelligence, satellite technology, critical minerals and fertilizers, while linking the talks to broader geopolitical concerns such as the wars in Ukraine and Gaza and Brazil’s position in the US‑China rivalry. On 27 July Xi told Lula that China is ready to deepen bilateral and multilateral strategic coordination with Brazil and voiced full support for Brazil’s rejection of external interference, reaffirming the push to speed up the MERCOSUR‑China free‑trade agreement and expand high‑technology cooperation. In August, rising U.S. tariffs on Brazilian exports prompted Lula and Xi to discuss further accelerating the Mercosur‑China agreement as a way to offset Washington’s trade barriers. This push follows a July 2025 executive order by U.S. President Donald Trump imposing 40 percent punitive tariffs on Brazilian goods, a move that has caused significant friction between the two nations. While Uruguay supports the initiative, formal negotiations require approval from all five Mercosur voting members, including Argentina and Paraguay, which have previously remained cautious. Meanwhile, the Mercosur‑Singapore Free Trade Agreement, effective as of 1 August, is already providing modernized trade rules for Brazil’s industrial sector, including improved customs procedures and expanded services market access. ## Claims - Chinese President Xi Jinping said China stands ready to further strengthen bilateral and multilateral strategic coordination with Brazil. (corroborated by 6 sources) - Xi Jinping said China supports Brazil in rejecting any external interference in its internal political affairs. (corroborated by 6 sources) - The statements were delivered during a phone conversation between Xi Jinping and Brazilian President Luiz Inácio Lula da Silva. (corroborated by 6 sources) - The call came shortly after Argentine President Javier Milei attacked Lula, causing a diplomatic row. (corroborated by 5 sources) - Brazil is preparing for an October presidential election in which Lula will face Senator Flávio Bolsonaro. (corroborated by 5 sources) - The leaders discussed cooperation in artificial intelligence, energy, critical minerals and other high‑technology sectors. (corroborated by 2 sources) - China and Brazil are accelerating negotiations on a free‑trade agreement between MERCOSUR and China. (single source) ## Timeline ### 2026-08-25: Brazil and China seek to accelerate Mercosur free trade talks Brazil and China are seeking to accelerate free trade negotiations between Mercosur and China, signaling a potential shift in trade dynamics following recent US punitive tariffs on Brazilian goods. 2 sources. https://clstr.news/cluster/brazil-and-china-seek-to-accelerate-mercosur-free-trade-talks ### 2026-08-06: Brazil shifts toward China trade talks as US tariffs rise U.S. tariffs push Brazil toward a Mercosur‑China trade pact while the new Mercosur‑Singapore deal offers ten industrial benefits, reshaping Brazil's trade strategy. 2 sources. https://clstr.news/cluster/brazil-shifts-toward-china-trade-talks-as-us-tariffs-rise ### 2026-07-27: China pledges deeper strategic partnership with Brazil Xi Jinping says China will deepen strategic ties with Brazil, backing its stance against external meddling, amid election‑year tensions and talks on a MERCOSUR‑China free‑trade deal. 16 sources. https://clstr.news/cluster/china-pledges-full-support-to-brazil-amid-claims-of-external-interference ### 2026-07-26: Brazil's Lula pushes Mercosur-China deal as nation caught in US-China rivalry Brazil's Lula urges faster Mercosur‑China trade talks and cites US‑China rivalry, while historian Niall Ferguson warns Brazil is stuck between the two powers. 4 sources. https://clstr.news/cluster/brazils-lula-pushes-mercosur-china-deal-as-nation-caught-in-us-china-rivalry ### 2026-07-04: Brazil's Lula backs Mercosur-China trade talks despite expert doubts Lula promoted a Mercosur‑China trade pact despite expert warnings of short‑term hurdles, while Brazil pledged US$100 million yearly to the Mercosur infrastructure fund to boost regional integration. 2 sources. https://clstr.news/cluster/brazils-lula-backs-mercosur-china-trade-talks-despite-expert-doubts --- Cite as: Mercosur-China trade talks amid US tariffs. CLSTR, https://clstr.news/situations/mercosur-china-trade-negotiations