Amid the buzz surrounding Brazilian President Luiz Inácio Lula da Silva’s China visit, which began on April 12, the leaders of both countries have signed more than 20 new bilateral agreements.
On the surface, the trip was a run-of-the-mill diplomatic visit. However, some say it underscores an ongoing deprioritization of relations with the United States.
Since the return of left-wing Lula to Brazil’s helm, U.S. officials and analysts have raised concerns over the South American country’s policy shift in favor of Beijing and other authoritarian regimes.
During a Senate Foreign Relations Committee hearing last month, Sen. James Risch (R-Idaho) expressed alarm over Brazil’s overarching cooperation with what he called “maligned foreign influences,” including China.
Brian Nichols, assistant secretary of state for Western Hemisphere Affairs in the U.S. State Department, said in the same hearing that he’s “absolutely concerned” about China’s heavy investment.
Part of the Brazil–China arrangement includes using the Beijing-backed New Development Bank (NDB) as a yuan clearing facility. The goal is to boost the volume and strength of China’s yuan in the Americas.
While in Shanghai, Lula oversaw the inauguration of Dilma Rousseff—his former chief of staff and a 1960s Marxist guerilla fighter—as the new head of the NDB. Rousseff served as Brazil’s president after Lula starting in 2011 but was impeached by the National Congress in 2016 for budget mismanagement.
The NDB was created under Rousseff’s watch, so her appointment as head of the NDB on April 13 was the cherry on top of policy decisions that have left Western officials spinning in recent months.
Writing on the Wall
Some Brazilians say Lula’s deepening of ties with China and pushing BRICS into the spotlight has been a long time coming.“They [BRICS] basically want to annul the United States as a world power,” Brazil’s former minister of foreign affairs, Ernesto Araújo, told The Epoch Times.
Araújo said Lula was focused on strengthening ties with anti-American governments well before his return to office in January.
Araújo noted that while working as the minister of foreign affairs under former President Jair Bolsonaro, the BRICS agenda took a backseat. However, with Lula in charge, China and BRICS have been bumped to the top of Brazil’s political priority list.
“Now it’s clear that Lula wants to go full speed with BRICS,” Araújo said.
During Lula’s visit, China’s Ministry of Foreign Affairs released a statement on April 14 saying that Chinese leader Xi Jinping declared China and Brazil as the “two biggest developing countries and emerging markets in the Eastern and Western hemispheres.”
The brief noted that the two countries have “extensive common interests.”
For some security analysts, therein lies the danger to the United States.
“Brazil already has a long-standing relationship with China, but the current turn is particularly precarious,” Irina Tsukerman, regional security analyst and founder of Scarab Rising, told The Epoch Times.
Tsukerman noted that China pumping massive amounts of cash into Brazil’s economy has essentially purchased loyalty, making Beijing’s anti-Western influence difficult to counteract.
Weaker Sanctions
Among the potential U.S. security impacts is the threat a weaker dollar poses to the strength of its sanctions.The United States has led a heavy sanctions package against Russia amid its ongoing attack on Ukraine. Concurrently, nations affected by the economic fallout of the Russia–Ukraine war have been searching for an alternative to dwindling greenback reserves. This is especially true in Latin American countries such as Brazil and Argentina.
The result has been a general readiness to abandon the dollar and build infrastructure for a new global reserve currency. This is chief among the list of goals for BRICS.
On a large enough scale, “de-dollarisation” will weaken the power of U.S. sanctions abroad, essentially diminishing one of the most powerful nonmilitary weapons at its disposal.
But as commodity inflation crippled countries in 2022, the debate for alternative currencies was reignited.
“While yuan as an exchange currency in the immediate future will not fully replace the U.S. dollar in Latin America, even adopting it ... creates a risk to weaken U.S. financial influence and facilitates sanctions circumvention. Not only for China and Russia but also for all their regional allies,” Tsukerman said.
Nichols said the administration of U.S. President Joe Biden aims to demonstrate that the United States is still the best country to align its opportunities and future with.
“We see around the hemisphere the promises the PRC [People’s Republic of China] makes about the quality of its investments, about the debt associated with its investments, are false,” he said.
