Brazilian President Luiz Inácio Lula da Silva and U.S. President Donald Trump held a phone call Friday, with trade and tariffs among the issues discussed.
According to the Brazilian government:
- Lula and Trump held a phone call on Friday, discussing both the bilateral relationship and the broader global agenda.
- Lula reaffirmed the need for negotiations over tariffs between Brazil and the United States.
- Lula reiterated Brazil’s commitment to cooperating with the U.S. in combating organized crime.
- Trump suggested that Brazilian and U.S. officials resume meetings as soon as possible.
The timing of the call is particularly interesting given Trump’s separate announcement on beef.
Earlier today, Trump announced a 90-day increase in the amount of beef that can enter the U.S. without the normal out-of-quota tariff, as the administration looks to increase supplies and bring down elevated beef and hamburger prices.
That – coupled with these comments – brings Brazil squarely into the discussion.
Brazil is one of the world’s largest beef exporters and already supplies significant quantities of beef to the United States. Brazilian beef is also particularly useful to the U.S. market because much of the imported lean beef is blended with fattier domestic beef in the production of ground beef.
There is no confirmation that Trump’s beef announcement and his conversation with Lula were directly connected, so that part remains speculation, but one can infer they are related.
It would make economic sense to at least have that discussion. Brazil has the production and export capacity, while the U.S. is dealing with a historically tight cattle supply and high beef prices.
Trump recently exempted beef from the additional 25% tariff imposed on a range of Brazilian products, but Brazilian beef can still be subject to the longstanding 26.4% out-of-quota tariff once the applicable quota is filled. Removing that hurdle temporarily could make it significantly easier—and cheaper—for additional Brazilian beef to reach the U.S. market.
So while we don’t know whether beef was specifically discussed during the Lula-Trump call, the combination of Trump’s beef initiative, Lula’s push for tariff negotiations, and Trump’s desire to quickly restart U.S.-Brazil meetings makes Brazil a country to watch as details of the beef plan emerge.
This article was written by Greg Michalowski at investinglive.com.