Trump Already Has a Victory in Lula’s Brazil
A U.S.-backed rare-earth deal shows how American strategic gains can survive a political setback in Brazil.
President Donald Trump has already secured a strategic advantage in Brazil with Luiz Inácio Lula da Silva's election, despite initial polls and markets predicting a different outcome. While Bolsonaro, Trump's ally, would have been a more convenient puppet, Lula's victory still allows access to critical resources for the U.S. The Serra Verde rare-earth producer, backed by a $750 million Department of War-backed special-purpose vehicle, has secured a 100% Phase I production agreement for 15 years, and USA Rare Earth, with a $1.6 billion Commerce Department funding deal, has acquired the company.
These transactions demonstrate that American access to strategic resources can still thrive under a government that resists Washington's political agenda. The U.S. International Development Finance Corporation has also signed a $565 million loan agreement to expand and improve Serra Verde's Brazilian mine, guaranteeing minimum prices for four magnetic rare earths.
Despite some friction between U.S. officials and Brazil, the commercial relationship persists, providing Washington with a foothold in the most significant economy of South America and reducing dependence on Chinese supply chains. Lula's government has shown its intent to retain more economic benefits locally through a law that promotes processing and industrial development inside Brazil.
While there may be challenges in meeting production milestones, the commercial foothold in Brazil remains valuable for both sides.
Written by urgent.news from Newsweek's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
