Tariffs and rare earths: Lula da Silva positions Brazil as a global player in U.S. visit

Brazil's President Luiz Inácio Lula da Silva visited Washington in May 2026 for discussions with the US administration covering trade tariffs, critical miner...

What Happened

Brazil's President Luiz Inácio Lula da Silva visited Washington in May 2026 for discussions with the US administration covering trade tariffs, critical minerals, and bilateral relations — a meeting described as covering rare earth cooperation as a major agenda item.
The visit came in the context of a 50% US tariff imposed on Brazilian imports; Brazil positioned its vast rare earth mineral reserves as strategic leverage ("a trump card") in tariff negotiations.
Lula insisted that Brazil's rare earths belong to Brazil and signaled openness to investment from any country — explicitly declining to exclude China — despite US pressure to prioritize American and allied-nation investment.
Brazil launched South America's first rare earth magnet plant (CIT SENAI ITR) earlier in 2026, signaling its intent to develop downstream processing capacity, not merely export raw ore.
The Brazilian development bank BNDES has included 10 rare earth projects in a USD 920 million funding program to develop critical mineral production capacity domestically.

Static Topic Bridges

Rare Earth Elements (REEs): Definition and Strategic Importance

Rare Earth Elements (REEs) are a group of 17 metallic elements comprising the 15 lanthanides (lanthanum through lutetium on the periodic table), plus scandium and yttrium. Despite the name, most REEs are not geologically rare — they are widely distributed but rarely found in concentrated, economically extractable deposits. REEs are indispensable in high-technology manufacturing: permanent magnets (neodymium-iron-boron) power electric vehicle motors, wind turbines, and military guidance systems; other REEs are used in semiconductors, phosphors for displays, catalysts, and medical equipment. Their strategic importance lies in this combination of ubiquity in modern technology and geographic concentration of processing capacity.

17 REEs: 15 lanthanides + scandium + yttrium.
Light REEs (LREEs): lanthanum, cerium, praseodymium, neodymium — more abundant, used widely.
Heavy REEs (HREEs): dysprosium, terbium, holmium, erbium — scarcer, critical for high-performance magnets and defense applications.
Key applications: EV motors, wind turbine generators, missile guidance, radar, smartphones, MRI machines, defense electronics.
China controls approximately 48% of proven global reserves, 70% of mining output, and approximately 91% of global refining/separation capacity.
China's share of permanent magnet production: approximately 94% globally (2024).

Connection to this news: Brazil's reserves — estimated at 20-23% of global supply, making it the world's second-largest holder — give it significant leverage in the US-China technology competition, where the US urgently seeks to diversify its REE supply chain away from China.

China's Dominance in Critical Minerals and Global Supply Chain Risks

China's control over REE supply chains extends beyond mining to the downstream processing and magnet fabrication stages — the most technologically demanding and value-added parts of the chain. This gives China asymmetric geopolitical leverage: export restrictions on REEs or REE-containing products can disrupt defense, automotive, and renewable energy industries across the US, Europe, Japan, and South Korea simultaneously. China has used this leverage in practice — including export controls imposed on rare earth elements and magnets in recent years. For the US, diversifying REE supply chains is therefore a national security priority, not merely an economic one.

China's rare earth refining dominance: approximately 91% of global separation capacity; Malaysia is a distant second.
New extraction/processing projects outside China average approximately 8 years from announcement to production.
Only a handful of industrial-scale refining facilities operate outside China: in Malaysia, the US (MP Materials at Mountain Pass, California), and Estonia.
US "Project Vault" (2026): a USD 12 billion initiative to stockpile critical minerals and develop domestic processing.
US Critical Minerals Ministerial (February 2026): hosted delegations from 54 countries and the European Commission to coordinate supply chain diversification.
China's export control regulations on dual-use technologies and rare earth materials represent an evolving tool of economic statecraft.

Connection to this news: Brazil's willingness to offer rare earth cooperation — while refusing to exclude Chinese investors — places it in a pivotal position in the US-China technology competition, demonstrating how resource-rich nations leverage supply chain vulnerabilities to extract trade concessions.

Resource Nationalism and Sovereignty Over Natural Resources

Resource nationalism refers to the tendency of governments to assert greater control over natural resource extraction and processing within their territory — including renegotiating contracts with foreign companies, increasing state ownership, imposing export restrictions, or requiring domestic processing before export. It is motivated by the desire to capture more economic value domestically from resource extraction and to prevent foreign exploitation of strategic assets. The principle of Permanent Sovereignty over Natural Resources, affirmed in UN General Assembly Resolution 1803 (1962), gives states the right to exercise control over their natural resources in the national interest.

UN GA Resolution 1803 (1962): "Permanent Sovereignty over Natural Resources" — foundational international law principle.
Brazil's position: REEs are Brazilian national assets; investment is welcome from any country on equal terms; processing and downstream manufacturing must benefit Brazil.
Brazil's development strategy: it seeks not just to mine REEs but to develop separation, refining, and magnet manufacturing domestically — capturing higher value-added stages.
CIT SENAI ITR plant (2026): South America's first rare earth magnet production facility — a downstream processing milestone.
BNDES: Banco Nacional de Desenvolvimento Econômico e Social — Brazil's national development bank; USD 920 million allocated to 10 critical mineral projects.

Connection to this news: Lula's refusal to give the US exclusive access — despite the tariff pressure — reflects resource nationalism: Brazil seeks to maximize domestic value from its REEs rather than become a raw material supplier in a US-led supply chain that excludes China.

Geopolitics of Critical Minerals and India's Position

The global scramble for critical minerals — including REEs, lithium, cobalt, nickel, and manganese — reflects the energy transition's dependence on specific geographies. For India, this has dual significance: India is both a consumer (for its domestic clean energy and defense manufacturing ambitions) and a potential supplier (India holds significant REE deposits, particularly monazite-bearing coastal sands in Odisha, Kerala, Tamil Nadu, and Andhra Pradesh). India's critical mineral policy is evolving — the Mines and Minerals (Development and Regulation) Amendment Act, 2021 and subsequent amendments designate certain minerals as "critical" and introduce changes to exploration licensing.

India's REE reserves: primarily in monazite (thorium + REE) deposits along the eastern and western coastline; held under government monopoly historically through IREL (India Rare Earths Limited).
India's critical mineral list (2023): 30 minerals designated as critical, including REEs, lithium, cobalt, nickel, graphite.
India-Australia Critical Minerals Partnership and India-US iCET (Initiative on Critical and Emerging Technologies) both include critical mineral supply chain cooperation.
India is a member of the Minerals Security Partnership (MSP) — a US-led grouping of 14 countries to accelerate critical mineral supply chain development.
KABIL (Khanij Bidesh India Ltd): a joint venture of NALCO, HCL, and MECL set up to acquire strategic mineral assets abroad.

Connection to this news: The Brazil-US rare earth diplomacy is a live example of the global critical mineral geopolitics that India must navigate — both as a potential supplier seeking to develop downstream value addition and as a consumer dependent on secure supply chains for its own manufacturing ambitions.

Key Facts & Data

Brazil holds an estimated 20-23% of global rare earth reserves — the world's second-largest.
China controls approximately 48% of proven REE reserves, 70% of mining output, 91% of refining/separation capacity, and 94% of permanent magnet production.
17 Rare Earth Elements: 15 lanthanides + scandium + yttrium.
US tariff on Brazilian imports at the time of Lula's visit: 50%.
Brazil's CIT SENAI ITR: South America's first rare earth magnet manufacturing plant, operational 2026.
BNDES critical minerals program: USD 920 million for 10 rare earth projects.
US Project Vault: USD 12 billion critical minerals stockpiling initiative (2026).
US Critical Minerals Ministerial: February 2026, 54 countries + EU.
New REE mine/processing projects outside China: average lead time approximately 8 years.
UN GA Resolution 1803 (1962): affirms Permanent Sovereignty over Natural Resources.
India's critical mineral list: 30 minerals (2023).
India's Minerals Security Partnership membership: 14-country US-led grouping.