Brazilian officials are racing to negotiate a reduction in proposed US tariffs of up to 37.5% on Brazilian exports, with trade minister Márcio Elias Rosa expected to hold a fourth videoconference with US Trade Representative Jamieson Greer this week. The urgency follows Washington’s decision to bring forward the tariff increase, originally scheduled to take effect after a meeting between Presidents Luiz Inácio Lula da Silva and Donald Trump last month. Viewed from Brasília, the talks are a delicate balancing act: Brazil is offering market access concessions but has declared its popular instant payment system, Pix, non-negotiable, even as US payment firms complain of unfair competition. The second tranche of US tariffs, a 12.5% levy based on allegations of forced labour, is being challenged by the Brazilian government as unfounded.

At home, Lula is navigating a political landscape as fraught as the trade talks. The president is pressing Senate President Davi Alcolumbre to schedule a vote on a constitutional amendment to abolish the six-day work week, a flagship labour reform that has stalled in Congress. Government allies in the lower house have refused to withdraw the bill’s urgency status, effectively blocking all other legislation until it is addressed. Alcolumbre, for his part, is waiting for a signal from Lula before advancing the government’s agenda, and a meeting between the two is being brokered before Lula departs for the G7 summit in France next week. Analysts in London note that the domestic logjam weakens Lula’s hand internationally, as he struggles to project authority on trade while his legislative agenda remains hostage to congressional infighting.

The G7 summit, set for 15-17 June in Paris, was initially seen as a potential venue for a Lula-Trump bilateral, but ministers now say such a meeting is unlikely. The absence of a direct presidential encounter underscores the frayed state of relations between the two largest democracies in the Americas. Marcos Troyjo, former president of the New Development Bank, observes that the tariff dispute has become deeply politicised, warning that economic pragmatism alone will not resolve the impasse. Henrique Meirelles, a former finance minister and central bank chief, agrees that the tariffs carry a short-term political component but argues that the underlying tensions—including US complaints over Pix—reflect genuine competitive grievances that will outlast any single administration.

Looking ahead, Brazil’s strategy appears to hinge on incremental technical talks rather than high-level political breakthroughs. The government is exploring a parallel trade agreement that would offer US companies greater access to the Brazilian market in exchange for tariff relief, but the Pix red line suggests limits to how far Brasília will bend. With the G7 offering no immediate prospect of a presidential handshake, the burden falls on Elias Rosa and Greer to find common ground. Yet as the clock ticks toward the next tariff deadline, the broader lesson from São Paulo and Washington alike is that trade disputes between these two nations are no longer merely economic—they are a barometer of a relationship that has lost its bearings.