In the ongoing tariff dispute with the United States, Brazil has a ‘trump ace’ that can change the direction of the entire global economy and that is its huge reserves of rare earth elements. These minerals are a group of 17 special metals which are needed in every high-tech machine today. Be it electric cars, solar panels, mobile phones or jet engines and missile systems.
Brazil has the second largest reserves after China
After China, Brazil has the second largest rare earth reserves in the world. According to the US Geological Survey, China has reserves of about 44 million metric tons, while Brazil has reserves of about 21 million tons. This is why these minerals are called ‘geopolitical weapons’, because the country controlling them can have a major impact on the global supply chain.
Possible meeting of Trump and Lula
Tariff tensions between Brazil and the US have increased in recent months. US President Donald Trump has imposed a 50% tariff on some exports from Brazil. Trump alleges that Brazil has shown a sense of ‘political vendetta’ in the ongoing case against his right-wing ally Jair Bolsonaro.
Now there is a possibility of a meeting between Trump and the President of Brazil on this issue during the ASEAN Summit to be held in Kuala Lumpur. Brazilian President Lula has clearly said that he is ready for talks on every issue from Trump to Gaza, Ukraine, Russia, Venezuela and rare earth magnets.
‘Door of opportunity’ opened by minerals
Brazil’s Mining and Energy Minister Alexandre Silveira says that due to the increasing distrust between China and America, a ‘big window of opportunity’ has opened for his country. He said, ‘Now a new combination of interests can be formed between Brazil’s mineral potential and American investment.’
In fact, several American companies are already investing money in Brazilian rare earth projects. However, at present this investment is mainly limited to mining. According to experts, Brazil should not stop at just mining, but should also delve into advanced processes like separation of minerals and manufacturing of magnets.
Option of partnership with China also
According to an ET report, Brazilian rare earth expert Gilberto Fernandes D believes that if Brazil wants to move forward rapidly in this field, then it should form a technological partnership with China. He said, ‘China has the most experience in this field.’
Interestingly, China is already Brazil’s largest trading partner and is investing heavily in its automotive sector. Both the countries are also members of BRICS group, due to which this relationship is deeper. But if Brazil moves closer to China, this move could certainly anger the Trump administration.
Brazil at the crossroads of global strategy
Today, Brazil’s position is very strategic, with on one hand the attraction of American capital and business advantages, and on the other hand, China’s technological capability and investment power. It will not be easy for the government to strike a balance between the two. As experts believe, Brazil’s strategic position is complex, but this is also its biggest strength.