【By Observer Net, Zhang Jingjuan】The tariff policy introduced by US President Trump has intensified global tensions. At the beginning of this month, Brazilian President Lula, who received a letter with tariff threats, quickly took action to deepen relations with China.

Reuters reported exclusively on the 21st that the Brazilian Ministry of Finance will set up a tax advisory office in China, highlighting the growing importance Brazil places on Sino-Brazilian relations.

Regarding Sino-Brazilian relations, Chinese Foreign Ministry Spokesperson Mao Ning once stated that China and Brazil are comprehensive strategic partners, and the bilateral relationship has continued to develop steadily in recent years, with frequent high-level visits and fruitful cooperation in all fields. The two countries have maintained close collaboration in international and regional affairs, becoming a model for developing major powers to work together and cooperate. This year marks the 50th anniversary of the establishment of diplomatic relations between China and Brazil, and both sides have agreed to hold the China-Brazil High-Level Coordination and Cooperation Committee meeting to jointly explore further expansion of bilateral cooperation.

According to a draft presidential decree seen by Reuters, Brazil will establish this new institution in Beijing. The preparatory documents mention that the "complexity of bilateral trade is continuously increasing," and it is necessary to strengthen cooperation in tax and customs matters.

The Brazilian Ministry of Finance stated that the tax advisory office or tax commissioner plays a "strategic role" in international cooperation, exchanging key information to combat tax and customs violations, and providing technical guidance to foreign investors and overseas citizens regarding Brazilian laws and regulations, which helps improve legal certainty and the business environment.

When asked why Brazil decided to establish a tax institution in China only now, the Brazilian Ministry of Finance denied any connection with the current trade war.

"There is no political motivation behind this move," the Brazilian Ministry of Finance stated directly, adding that discussions related to this matter had already taken place in Brazil in 2023, and since January 6, multiple departments have participated in relevant technical reviews.

The Brazilian Ministry of Finance said that the establishment of the relevant advisory office reflects the importance of bilateral trade and the necessity of deepening cooperation on tax and customs issues.

Currently, Brazil has four tax and customs commissioner institutions abroad: established in Washington in 2000 and in Buenos Aires, the capital of Argentina, in 2000; and in Asuncion, the capital of Paraguay, and Montevideo, the capital of Uruguay, in 2002.

The United States is the largest source of foreign direct investment for Brazil, while Argentina, Paraguay, and Uruguay are founding members of the Southern Common Market (Mercosur) where Brazil is located.

President Lula of Brazil IC photo

At the beginning of this month, Trump wrote to Brazilian President Lula, threatening to impose a 50% tariff on Brazilian goods starting from August 1. Trump directly linked the tariff increase to the case of Brazil's former president Bolsonaro and the Brazilian Supreme Court's requirement for American social media companies to comply with Brazil's digital security law, attempting to pressure the Lula government. He claimed that the trial of Bolsonaro was "political witch-hunting" and urged Brazil to "immediately" drop the charges against him.

Andre Pagliarini, an assistant professor at Louisiana State University's Department of History and International Studies, previously stated that Brazil's dependence on the US market is not very high, and its trade volume with the US is far less than its trade volume with China. Imposing tariffs would not benefit Bolsonaro's situation, but could potentially gain more political support for Lula.

Brazil was the first developing country to establish a strategic partnership with China and the first Latin American country to elevate bilateral relations to a comprehensive strategic partnership. Since 2009, China has been Brazil's largest trading partner and one of its main sources of foreign investment.

According to data from the General Administration of Customs of China, the bilateral trade volume between China and Brazil in 2024 reached 188.17 billion U.S. dollars, an increase of 3.56% compared to the previous year. Data from the Office of the U.S. Trade Representative (USTR) shows that the bilateral trade volume between the United States and Brazil in 2024 was approximately 92 billion U.S. dollars. In addition, exports to the United States accounted for only 2% of Brazil's gross domestic product (GDP), while exports to China were more than twice that amount.

Data from the Ministry of Development, Industry, Trade and Services of Brazil shows that in 2024, China continued to be Brazil's main export destination, with exports to China accounting for about 28% of Brazil's total exports. In the first quarter of 2025, Brazil's import and export trade volume reached 144.6 billion U.S. dollars, with bilateral trade between Brazil and China reaching 38.8 billion U.S. dollars, and imports from China increased by 35%.

Lately, Sino-Brazilian relations have continued to deepen. The Brazilian news agency reported earlier this month that China plans to build a railway across the continent of South America, connecting the Atlantic coast and the Chancay Port in Peru, known as the Two-Ocean Railway project. The two sides signed a memorandum of understanding on July 7 to prepare for joint research on the feasibility of this project.

According to reports, the Two-Ocean Railway is about 4,500 kilometers long and will integrate Brazil's "East-West Integration Railway" (FIOL), "Central-West Integration Railway" (FICO), and "North-South Railway" (FNS). Compared to the current shipping route through the Panama Canal to Asia, once completed, this railway is expected to save up to about 12 days of freight time.

This article is an exclusive piece by Observer Net. Reproduction without permission is prohibited.

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