Brazils Balancing Act Between US & China

As the global tussle between China and the United States intensifies, few countries have more leverage — or more to lose — than Brazil.

Last week, President Luiz Inácio Lula da Silva was the guest of honour at a major China–Latin America summit in Beijing. It was a striking scene: Lula, accompanied by a high-powered delegation of ministers, signing a raft of co‑operation agreements and praising China with open “affection”. The two sides unveiled R$27bn ($4.8bn) in planned investments, part of more than 20 bilateral deals.

Yet while Lula was shaking hands with Xi Jinping in Beijing, Brazil’s state governors and corporate elite were working the rooms of Wall Street. A separate contingent, including the leadership of JBS — the world’s largest meat producer — turned up in New York for a series of bank and investor meetings dubbed “Brazil Week”.

The choreography was deliberate. Brazil is making it clear it will not choose sides in the world’s defining geopolitical contest. Instead, it is playing both ends against the middle — and doing so with uncommon dexterity.

Xi’s Charm Offensive

From Beijing, Xi offered a glowing account of China’s growing relationship with Latin America. Trade had surged forty-fold in 25 years to exceed $500bn annually, he said. In a thinly veiled jab at US President Donald Trump, Xi denounced tariff wars as “bullying” and warned of “self-isolation”.

Lula, whose political instincts lean towards multipolarism and south-south co-operation, was an ideal partner for the moment. His government is keen to boost trade, attract investment and assert Brazil’s leadership in the region.

Yet despite the show of solidarity, there were limits. Brazil did not join China’s Belt and Road Initiative, and the visit produced no signature infrastructure projects. Marcos Caramuru, Brazil’s former ambassador to China, described the outcome as “a consolidation of political dialogue” more than a leap in economic ties.

Courting Capital in New York

Meanwhile, back in the US, Brazil’s business leaders were quietly reassuring investors that they remain committed to the longstanding transcontinental alliance.

“Brazilian industry is here because it understands perfectly the importance of partnership with the US,” said Ricardo Alban, head of the industry confederation. “We go back more than 200 years and will never belittle that history.”

While some US firms are uneasy about Lula’s left-leaning fiscal agenda — Brazil is running a deficit of nearly 8 per cent of GDP — they are still interested. Dario Durigan, Brazil’s deputy finance minister, emphasised that Brazil was not picking sides. “In a volatile world,” he said, “Brazil is positioning itself as a safe harbour.”

For some companies, the US remains the primary destination for capital markets. JBS, which already has deep exposure to the American consumer, opted to skip Beijing entirely — a decision likely influenced by its upcoming US stock market listing.

Commodities Give Brazil Leverage

In theory, Brazil looks like a junior partner in the China relationship. In practice, it holds strong cards.

Brazil is one of the few countries to run a large trade surplus with China. It supplies nearly 60 per cent of the world’s soyabeans, with China the biggest buyer. Its dominance in meat exports gives it additional heft. And with rivals like the US and Paraguay either politically antagonistic or diplomatically estranged from Beijing, Brazil’s strategic value rises further.

That leverage affords Brazil some insulation from the worst of Trump’s protectionist backlash — for now. Chinese dependence on Brazilian agriculture is hard to unwind. Even so, there are no guarantees it will last.

Brazil’s Realpolitik

Brazil’s dual-track diplomacy — favouring political ties with Beijing and commercial links with the US — may be its only viable path. As Marcos Troyjo, a former head of the New Development Bank, put it: “Brazil is more culturally aligned with the US. But for long-term investment, the Middle East, China and Singapore may offer more upside.”

This posture reflects Brazil’s understanding of how the two superpowers operate. In China, progress flows through state-to-state relationships. In the US, the private sector leads. Lula’s government, well aware of both dynamics, is engaging accordingly.

The fact that Lula closed his speech in Beijing not by praising Xi but by urging Latin American unity also speaks volumes. Brazil is not merely choosing between Beijing and Broadway — it is trying to forge a third way that elevates its own regional influence.

Outlook

Brazil’s strategy appears to be working, at least for now. It remains on good terms with both Washington and Beijing. It has secured a pipeline of investment from China, while keeping financial and strategic ties with the US intact.

Yet this balancing act is not without risks. A hardening of the US-China standoff could make neutrality untenable. Brazil’s economic success — and its diplomatic space — depend on continued access to both markets.

With the US escalating tariffs on Chinese goods to 145 per cent, and China responding with retaliatory measures, Brazil’s hedging becomes more critical. Unlike firms in China, where Trump’s tariffs have triggered production shutdowns , Brazil’s diversified diplomacy gives it more room to manoeuvre.

Whether that continues will depend on how deftly it can manage its foreign policy — and whether its leaders can resist the pressure to choose sides as the US-China rivalry deepens.