From May 10 to 14, Brazilian President Luiz Inácio Lula da Silva visited China for the sixth time. During his stay, Chinese leaders held meetings with Lula to discuss consolidating the China-Brazil Comprehensive Strategic Partnership and aligning their development strategies. The leaders also exchanged views on addressing external challenges brought about by the policies of U.S. President Donald Trump's administration.

Additionally, President Lula attended the Fourth Ministerial Meeting of the Forum of China and Community of Latin American and Caribbean States (China-CELAC Forum) and participated in a series of bilateral economic and trade activities.

Political and economic context 

Brazil is currently facing economic pressures from fiscal capacity, interest rates and foreign trade. The Brazilian Government's fiscal stress has made it difficult for Lula's administration to implement further economic stimulus measures. Meanwhile, domestic interest rates remain high and show signs of rising. Due to the previous appreciation of the U.S. dollar, Brazil faces considerable inflationary pressure. The Central Bank of Brazil has raised interest rates six consecutive times, resulting in higher financing costs that suppress both business investment and household consumption.

The Trump administration's recent tariffs have directly impacted Brazilian exports, while the U.S. Federal Reserve's refusal to cut interest rates has further exacerbated inflationary pressure in Brazil. These have added external policy risks to its exports.

According to a report by the Central Bank of Brazil in March, under the impact of the U.S.' tariffs on steel and aluminum, Brazil's economy is projected to grow by 1.99 percent in 2025, 0.02 percentage points lower than previous forecasts. During the same period, the inflation rate is expected to reach 5.66 percent. The Organization for Economic Co-operation and Development (OECD) also predicts that Brazil's benchmark interest rate may need to increase by another 1.25 to 1.5 percentage points. According to the OECD, loan interest rates for Brazilian companies are already high, and further increases could worsen private sector debt risks.

Given the circumstances, Brazil is eager to reach more economic cooperation agreements with China. It hopes to secure a larger share of the Chinese market and attract Chinese investment. During the U.S.-inflicted trade war against China in 2018, Brazil's exports to China grew sharply. Although Brazil is currently impacted by Trump's tariffs, Lula's administration remains optimistic about expanding its market presence in China.

Brazil's Minister of Mines and Energy Alexandre Silveira described the tariff war initiated by Trump as an "opportunity" for Brazil. Roberto Perosa, head of the Brazilian Association of Meat Exporting Industries (ABIEC), believes the country has the potential to become a long-term and reliable supplier of agricultural and livestock products to Asian markets, particularly China. He sees the changing trade landscape as providing unprecedented opportunities for China-Brazil cooperation. Additionally, Brazil's Minister of Agriculture and Livestock Carlos Fávaro emphasized the urgent need for his country to expand its agricultural exports to China to offset the export losses caused by the steep U.S. tariffs. 

Amid the impact of unilateral policies, emerging economies like Brazil are actively seeking common development, aiming to reconstruct global supply chains. Attracting Chinese investment to Brazil and promoting China-Brazil strategic cooperation were key objectives of Lula's visit, during which China and Brazil signed cooperation agreements in agriculture, green energy and technology, among other sectors.

Lula's administration has consistently championed "multilateral diplomacy" and "South-South cooperation" and emphasized its independent foreign policy. In his third term, Lula reinstated Brazil's membership in the CELAC and advocated for strengthening the BRICS mechanism. (BRICS is a 10-member group of emerging economies originally consisting of Brazil, Russia, India, China and South Africa—Ed.)

His visit to China came at a time of considerable China-U.S. tensions and global economic uncertainty fueled by Trump's tariffs. The trip is seen as a step toward Global South cooperation in addressing international challenges and enhancing its voice in global governance.

Recent China policy 

Under Lula, Brazil has adopted a foreign policy that markedly differs from that of his predecessor, Jair Bolsonaro. It stresses national self-reliance and strategic autonomy, seeks to position Brazil as an independent coordinator among global powers, and fosters multilateral cooperation aligned with its national interests. Central to this approach is a commitment to solidarity with Global South nations, including China.

Recognizing China's status as Brazil's largest trading partner, Lula's government views strengthening ties with Beijing as more pragmatic than aligning unconditionally with the U.S. The two nations share robust cooperation in infrastructure, energy and technological innovation. Amid shifting global trade dynamics, their economic interdependence continues to grow.

In contrast, current U.S. foreign policy, characterized by protectionist measures, has introduced volatility into global supply chains and economic systems. The "America First" doctrine has led to diminished economic engagement with Latin American countries and the imposition of stricter trade restrictions on some nations. In the face of these challenges, Lula's administration is proactively expanding Brazil's international partnerships to ensure greater resilience and strategic flexibility.

Key takeaways 

Lula's recent visit to China underscores a strong commercial agenda aimed at expanding exports and attracting Chinese investment to counteract challenges posed by U.S. trade protectionism.

Brazil is eager to attract Chinese investment in its infrastructure and energy sectors. Discussions have focused on enhancing Brazil's power grid infrastructure to facilitate a transition to green energy. Both governments and enterprises from the two sides have already held discussions on cooperation in railways, highways, energy and power grids.

In terms of industrial transformation and technological innovation, China and Brazil aim to deeply integrate their industrial chains, promoting technology transfer, supply chain improvements and investment. Over the past year, Brazil has selected numerous cooperation options in strategic areas such as photovoltaics, semiconductors, energy and automobiles under its industrial policy of the New Industry Brazil, and Chinese and Brazilian companies are expected to engage in deeper cooperation in these fields.

The leaders of China and Brazil also held discussions on agricultural cooperation, as Brazil remains China's largest source of soybean imports.

Without a doubt, this visit will deepen traditional friendship, elevate bilateral cooperation and foster positive change in the political and economic landscape both regionally and globally. BR

The author is an associate professor of economics at the Center for Latin-American and Caribbean Studies at Southwest University of Science and Technology 

Copyedited by Elsbeth van Paridon 

Comments to dingying@cicgamericas.com