Chinese investment in Brazil is surging and the two nations have come to nearly 40 cooperation agreements.
Brazil is fast becoming China’s most important economic and geopolitical ally in the western hemisphere, giving Beijing a foothold in America’s backyard just as tensions between the world’s two superpowers are heating up.
Under leftist president Luiz Inácio Lula da Silva, Chinese investment in Brazil is surging and the two nations have come to nearly 40 cooperation agreements. The deepening ties between Brazil and China are part of a larger trend of Chinese economic and geopolitical maneuvering in Latin America intended to undermine historical U.S. dominance in the region.
In August, Lula and Chinese ruler Xi Jinping had a conversation in which they promised to promote bilateral ties and bashed the U.S. for its protectionism and unilateralism, Chinese state media reported. The meeting came after Brazilian and Chinese officials agreed in July to cooperate further in sectors such as infrastructure, artificial intelligence, and medicine.
Since 2023, Lula and Xi have held several bilateral meetings focused on building Brazil’s relationship with China. In May, Lula celebrated more than $4.2 billion of incoming Chinese investment across Brazil’s economy as President Trump’s tariffs sent shockwaves throughout the global economy. A recent study from the Brazil-China Business Council found that Brazil is the third largest global destination for Chinese investment. Last year, Chinese investment in Brazil more than doubled as Lula and Xi strengthened the relationship between the two countries. The U.S. remains the global leader in foreign and domestic investment in Brazil, having poured $8.5 billion into South America’s largest economy.
“If it’s up to my government, our relationship with China will be indestructible,” Lula said at a business forum.
Last year, Xi and Lula struck over 40 economic agreements to bolster Brazil’s ties to China in sectors ranging from farming to solar power. The agreements marked a new high point in relations between Brazil and the Chinese Communist Party, which uses economic agreements to build geopolitical ties in developing nations around the world. China does so through its Belt and Road Initiative, which Lula declined to join in 2023. But China and Brazil agreed last year to find “synergies” between Belt and Road and Brazil’s economic development projects.
Brazil’s closeness with China puts one of the largest countries in America’s hemisphere firmly in the hands of the foremost geopolitical rival to the U.S., potentially threatening U.S. security and economic interests.
“America’s security challenges are intensifying in our hemisphere because of Brazil’s deepening ties with Communist China. Brazil is creating security risks for the United States, threatening not just our economy, but also critical infrastructure, advanced technologies, and military positioning,” said Michael Lucci, CEO of State Armor, a CCP watchdog.
“Brazil’s drift toward Beijing must be met with decisive U.S. action to reassert American leadership in our own backyard.”
Brazil’s pivot toward China is most evident in Chinese telecommunications firm Huawei’s domination of Brazil’s 5G infrastructure. Brazil’s telecom agency announced earlier this year that Huawei controls 44.6 percent of Brazil’s 5G infrastructure. The first Trump administration restricted Huawei’s access to U.S. technology and deemed it a national security threat because of its ties to the Chinese Communist Party.
“President Lula’s shortsighted eschewing of an American partnership is bad news for Brazil’s long-term economic prosperity. Reevaluating his hostility toward the US would better serve both our countries and strengthen security for the western hemisphere,” said Joe Grogan, who served as a domestic policy adviser in Trump’s first administration.
President Donald Trump spoke with Lula, saying afterwards that the call went well but declining to provide details.
“This morning, I had a very good telephone call with President Lula, of Brazil. We discussed many things, but it was mostly focused on the Economy, and Trade, between our two Countries. We will be having further discussions, and will get together in the not too distant future, both in Brazil and the United States,” Trump shared on Truth Social.
Lula’s office said the pair spoke for 30 minutes over video conference and exchanged phone numbers. They discussed meeting in person at a later date.
It was the first substantive conversation between Trump and Lula since the Trump administration imposed tariffs and sanctions on Brazil because of what the U.S. considers unfair treatment of former President Jair Bolsonaro and the Brazilian government’s stringent online censorship laws.
Trump signed an executive order in July raising U.S. tariffs on Brazil from 10 percent to 50 percent, despite the U.S. having a trade surplus with Brazil.
Lula’s office said the tariffs came up during the call and described it as a friendly interaction. The two leaders spoke briefly at the United Nations General Assembly last month and Trump spoke positively of Lula afterwards. Trump has delegated tariff negotiations to Secretary of State Marco Rubio, who will continue to work with his Brazilian counterparts. It is unclear if Brazil’s deepening ties to China came up on the call.
China’s moves to strengthen ties with Brazil are part of its broader strategy in Latin America and the Caribbean. Over 20 countries in the region have become part of the Belt and Road Initiative, according to a Council on Foreign Relations report. Several countries in the region have come to free trade agreements with the Chinese regime, helping China to become South America’s largest trading partner and the second largest in Latin America.