On Sunday night, July 27th, 2026, Chinese President Xi Jinping and Brazilian President Luiz Inacio Lula da Silva agreed to accelerate negotiations for a trade agreement between China and Mercosur. This marks a significant shift for Brasilia, which had long resisted such a deal within the South American bloc.
The two leaders spoke by telephone for over an hour, with the Brazilian presidency stating they "coincided on the importance of speeding up the talks for a Mercosur-China agreement that contemplates the necessary flexibilities."
The official readout highlighted discussions on aligning national development projects and expanding cooperation in strategic and high-technology sectors, including artificial intelligence, satellites, critical-minerals processing, and fertiliser trade. Additionally, a short-stay visa waiver agreement was announced to boost tourism and business travel between the countries.
This development follows Washington's announcement last week of a further 12.5% levy on 60 trading partners, including Brazil, citing inadequate efforts to combat forced labour. Brazil plans to retaliate against these US tariffs, which are also seen as partly aimed at former leader Bolsonaro.
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