We have a proposal for a federal-level agreement. We're still waiting.
Two of the Western Hemisphere's largest economies find themselves negotiating the future of critical minerals — lithium, rare earths, the building blocks of batteries and defense systems — while struggling to trust each other enough to sign a single federal agreement. The United States, anxious to loosen China's grip on global mineral supply chains, has identified more than fifty promising projects in Brazil and committed hundreds of millions in financing, yet the partnership remains suspended between American impatience and Brazilian wariness. Diplomatic missteps — a botched prison visit request, a template memorandum sent with the wrong country's name, a deal struck directly with a Lula rival — have turned a strategic opportunity into a test of whether great-power pragmatism can survive the friction of sovereign pride.
- The US has poured $600 million in financing commitments into Brazilian mining ventures and mapped over fifty projects, yet cannot secure a federal-level agreement because the two governments have stopped fully trusting each other.
- A US official's attempt to visit imprisoned ex-president Bolsonaro, and a draft memorandum apparently copied from another country's template, sent a clear signal to Brasília: Washington was either meddling or careless — neither acceptable.
- Brazil's trade ministry boycotted a US-sponsored critical minerals forum in São Paulo, framing the absence as a scheduling conflict but signaling something closer to a diplomatic rebuke.
- The US sidestepped the federal government entirely by signing a minerals cooperation deal with Goiás Governor Ronaldo Caiado — a Lula political opponent — deepening suspicions in Brasília about American intentions.
- A planned Lula-Trump summit in Washington has been postponed, leaving the negotiations adrift and dependent on a future visit that may itself become a bargaining chip.
The United States has identified more than fifty mining projects across Brazil and committed roughly six hundred million dollars through its financing agencies, positioning the country as a cornerstone of its strategy to reduce dependence on Chinese rare earth minerals. Yet the federal agreement meant to formalize this partnership remains unsigned, suspended in a fog of mutual frustration.
The impasse became public when Gabriel Escobar, the US charge d'affaires, announced a separate deal with the state of Goiás while admitting that federal negotiations had stalled. 'We've had some preliminary conversations, but we're still waiting,' he said — words that captured the mood precisely. The Brazilian government, under President Lula, had already grown suspicious of American intentions, and a series of missteps sharpened that suspicion considerably.
Days before a US-sponsored critical minerals forum in São Paulo — attended by Citi, Anglo American, and other major players — a US official requested permission to visit imprisoned former president Jair Bolsonaro. Brazil denied entry, accusing the official of misrepresenting his purpose. Then came word that the draft memorandum of understanding Washington had sent appeared to be a template from another country, with the wrong name still in the text. The Brazilian government did not attend the forum, citing a prior commitment, though the timing read as protest.
The Goiás agreement added another layer of tension. The state holds significant lithium and niobium reserves and is home to Serra Verde, Brazil's only commercial rare earth producer. The deal commits both sides to mineral mapping, technology sharing, and — most ambitiously — developing full domestic processing capacity, from separating rare earths to fabricating permanent magnets. But Goiás Governor Ronaldo Caiado is a Lula political rival, and Brasília read the agreement as Washington deliberately building relationships around the federal government rather than through it.
The irony is that domestic processing is also central to Lula's own vision for Brazil's mineral wealth. A trade ministry official confirmed that developing local manufacturing capacity is a government priority — meaning both sides want roughly the same thing, but cannot yet agree on who leads and who follows. A planned Lula-Trump meeting in Washington has been postponed amid broader regional tensions, and the negotiations continue through the US Trade Representative's office, tethered to the uncertain prospect of a future summit. Trust, once strained, rarely repairs itself on a diplomat's schedule.
The United States has identified more than fifty mining projects scattered across Brazil and sees the country as a potential destination for billions of dollars in investment. Yet the negotiations meant to unlock that capital are stalled, caught between competing visions of how the partnership should work and a series of diplomatic missteps that have left both governments frustrated with each other.
Gabriel Escobar, the US charge d'affaires, acknowledged the impasse on Wednesday while announcing a separate agreement with the state of Goiás. "We have a proposal for a federal-level agreement," he said. "We've had some preliminary conversations, but we're still waiting." The waiting reflects a deeper problem: the Brazilian government, under President Luiz Inácio Lula da Silva, has grown wary of American intentions, and the Americans have grown impatient with Brazilian caution.
The friction surfaced most visibly at a critical minerals forum in São Paulo, sponsored by the US embassy and hosted by the American Chamber of Commerce. The event was designed to connect American investors with Brazilian companies interested in producing rare earths, lithium, and other minerals essential to batteries, semiconductors, and defense systems. Major financial players like Citi and Anglo American attended. But the Brazilian government did not. Officials cited a scheduling conflict with a prior commitment, though the timing suggested something else: a protest against American overreach.
Days earlier, a US official had requested permission to visit Jair Bolsonaro, the imprisoned former president, in prison. Brazil saw this as an attempt to meddle in its internal affairs and denied entry, accusing the American of misrepresenting his purpose. The episode stung. Then came another embarrassment: the US had sent Brazil a draft memorandum of understanding that appeared to be a template copied from another country, complete with the wrong name. The error was later corrected, but the sloppiness had already registered as disrespect.
The real tension, though, runs deeper than diplomatic theater. The US is racing to reduce its dependence on Chinese rare earth minerals and sees Brazil as a critical alternative source. American financing agencies—the Development Finance Corporation and the Export-Import Bank—have already committed roughly six hundred million dollars to Brazilian mining ventures. But the Americans also signed their separate deal directly with Ronaldo Caiado, the governor of Goiás and a political opponent of Lula. Brazilian officials viewed this as an end-run around the federal government, a way of bypassing Lula's authority and building relationships with his rivals.
Goiás holds significant reserves of lithium and niobium and is home to Serra Verde, the only company in Brazil that commercially produces rare earth elements. The state agreement commits the US and Goiás to cooperating on mineral mapping, connecting local miners with American technology, and strengthening regulations. More ambitiously, it aims to develop complete processing and manufacturing capabilities in the state—separating rare earths, producing alloys, and fabricating permanent neodymium magnets. This matters because Brazil currently exports raw minerals; the real value lies in processing them domestically.
That priority—domestic processing—is also central to Lula's vision. A Brazilian trade ministry official, speaking anonymously, confirmed that advancing local manufacturing capacity is a key goal for the government. Yet the Americans seem willing to work around Lula to achieve their own objectives. A planned meeting between Lula and President Donald Trump in Washington this month has been postponed, caught in the crossfire of escalating tensions between the US and Israel on one side and Iran on the other, as well as the bilateral friction between Brazil and America. The negotiations continue through the US Trade Representative's office, and they remain tied to the possibility of a future Lula visit to Washington. But trust, once fractured, takes time to rebuild.
Citações Notáveis
We have a proposal for a federal-level agreement. We've had some preliminary conversations, but we're still waiting.— Gabriel Escobar, US charge d'affaires
Brazilian officials viewed the US signing a separate deal with Goiás governor as an attempt to bypass the federal government.— Brazilian government source
A Conversa do Hearth Outra perspectiva sobre a história
Why does the US care so much about Brazilian minerals right now?
China controls the supply chains for rare earths and critical minerals. The US is trying to build alternatives before it becomes a strategic vulnerability. Brazil has the reserves and the geography, but it's not automatic.
So why is Lula's government hesitant?
They want to process the minerals themselves, not just dig them up and ship them out. The US seems willing to skip the federal government and work with states instead. That looks like disrespect.
The visit to Bolsonaro—was that really about seeing a prisoner, or something else?
It was framed as a request to visit. But Bolsonaro is Lula's political enemy, and he's in prison. The optics were terrible. Brazil read it as the US trying to maintain relationships with the opposition.
And the memorandum with the wrong name in it?
It was a template. Probably sent to multiple countries. But when you're already suspicious, a careless mistake feels intentional.
What happens if they can't reach a deal?
The US finds another partner, or moves slower. Brazil misses out on investment and technology transfer. China stays dominant in rare earths. Everyone loses something.
Is there a path back from here?
The Lula-Trump meeting, if it happens, could reset things. But it requires both sides to acknowledge they need each other more than they need to score points.