Trade tensions with Washington are giving Canada and Brazil a fresh reason to strengthen their economic relationship. Brazilian President Luiz Inácio Lula da Silva has expressed hopes of doubling trade with Canada, signalling a major shift toward new international partnerships as U.S. President Donald Trump’s tariffs continue to disrupt global commerce.
Speaking after meeting Canadian Prime Minister Mark Carney in Manila on November 15, 2026, Lula emphasized that Brazil would seek new customers and suppliers rather than depend on concessions from Washington. With bilateral merchandise trade already reaching $14.7 billion in 2025, the two countries have a substantial foundation for expansion.
The emerging partnership could create opportunities in agriculture, energy, critical minerals, manufacturing and investment, while giving both governments greater flexibility in an increasingly unpredictable trading environment.
Lula’s Ambition Would Nearly Double a $14.7 Billion Trading Relationship
Lula’s proposal emerged from his November 15 meeting with Carney in Manila. Speaking to reporters afterward, the Brazilian president said he wanted stronger relations with Canada so that the two countries could double their trade. His remarks were an expression of ambition, not an announcement that a new commercial agreement had been signed or that a timetable had been settled.
The scale is significant. According to Canada’s government, two-way merchandise trade with Brazil reached C$14.7 billion in 2025. A doubling of that baseline would mean about C$29.4 billion in annual goods trade, although future exchange rates and the mix of products would affect any comparison. Brazil is already Canada’s largest merchandise-trading partner in South America. For companies shipping goods between the two countries, the important question is what turns a presidential target into additional orders: better access to markets, dependable transport, investment, and agreements that survive changes in political leadership.
Trump’s Tariffs Are Pushing Brazil Toward New Trading Partners
Trump’s tariff policies help explain why Lula framed the Canada relationship as part of a search for partners. Speaking in Manila, he argued that Brazil had responded to American trade barriers by finding new places to buy and sell rather than pleading for relief. He pointed to increases of 15% in trade with Indonesia and 13% with Vietnam, although those figures do not establish how much business Canada might gain.
The confrontation has concrete consequences. U.S. measures imposed in 2026 included a 25% duty on certain Brazilian goods and a 12.5% tariff linked to forced-labour allegations, with exemptions and other product-specific rules. Brazil has challenged American actions but has kept negotiations open. In September, Lula said his government would not deploy its reciprocity law while talks continued. His message is therefore not that Brazil is abandoning the United States. It is that Washington should no longer determine Brazil’s trading options.
Canada-Brazil Trade Was Already Growing Before Lula’s Announcement
Brazil and Canada were expanding their commercial relationship before Lula unveiled his target. Canadian government figures show that merchandise trade grew 16% in 2025, reaching C$14.7 billion. The relationship also extends beyond physical shipments: two-way services trade exceeded C$2.4 billion that year, up 4%. Those figures capture a broader connection involving businesses that sell expertise and services as well as products.
More recent figures point in the same direction. The Brazil-Canada Chamber of Commerce reported US$8.41 billion in bilateral merchandise trade during the first nine months of 2026, 13% more than in the corresponding period of 2025. Brazilian exports to Canada reached US$5.69 billion, while purchases of Canadian products reached US$2.72 billion. The chamber’s statistics are reported in U.S. dollars, whereas Ottawa’s annual figures are in Canadian dollars, so the totals should not be compared without conversion. The underlying trend, however, is unmistakable: trade was already growing in both directions.
Canadian Fertilizers and Aerospace Products Could Benefit
The clearest Canadian opportunity may be in products Brazil needs to keep its farms and industrial facilities running. Fertilizers are central to the relationship. From January through September 2026, Brazil bought US$1.41 billion in potassium chloride from Canada, according to the Brazil-Canada Chamber of Commerce. That single product represented nearly 52% of Brazil’s imports from Canada during the period. It is a direct connection between Canadian mineral production and Brazilian agriculture.
There is a more technological side to these shipments. Brazilian purchases of Canadian turbojet engines in a major product category rose 61.4% to US$195.4 million over the same nine months. Helicopters and certain medicines also recorded gains. Canadian government figures show goods exports to Brazil reached C$3.1 billion in 2025, up roughly 25%. For suppliers, deeper trade is not simply larger headline totals. It is recurring demand for parts, machinery and essential materials that businesses can plan around reliably.
Brazil’s Gold, Coffee and Agricultural Exports Are Important to Canada
Brazil sells more merchandise to Canada than it buys from Canadian suppliers. In 2025, Canada’s imports from Brazil reached C$11.6 billion, compared with C$3.1 billion in exports going the other way. Brazilian shipments included gold, aluminum oxide, cane sugar, coffee and aircraft. This imbalance is not proof that the relationship is failing; it shows that the two economies contribute different products to commercial exchange.
Gold has become important. Brazil-Canada Chamber of Commerce data show gold bullion accounted for US$3.06 billion, or 53.8%, of Brazilian goods exported to Canada in the first nine months of 2026. That concentration means changes in precious-metal prices can heavily influence the reported value of trade. Other products tell a more varied story: Brazilian frozen-beef exports grew sharply from a small base, while alumina, sugar and green coffee shipments declined. Doubling trade would likely require growth across several product categories, not only stronger prices for gold.
A Canada-Mercosur Free Trade Agreement Could Be the Breakthrough
The most consequential policy question is whether Canada and Mercosur can complete a free-trade agreement. Brazil belongs to the South American bloc alongside Argentina, Paraguay, Uruguay and Bolivia. Canada opened negotiations with Mercosur in 2018, but progress paused during the pandemic before talks restarted in October 2025. Ottawa says the bloc’s merchandise trade with Canada reached C$19.4 billion in 2025, underlining that the agreement extends beyond Brazil alone.
In July 2026, Canadian and Brazilian foreign ministers reaffirmed their commitment to moving those negotiations forward. After the Manila meeting, Brazilian reporting said the leaders wanted to work toward completing an agreement in the coming months. That is an intention, not a completed treaty. A successful pact could create more predictable rules for exporters and investors, but negotiators have to translate political support into workable terms. Until an agreement is concluded, signed and implemented, businesses cannot count on its prospective tariff preferences.
Critical Minerals Could Become a Major Area of Cooperation
Critical minerals offer another path to a larger partnership, but they also highlight how carefully both governments want to manage strategic resources. Carney and Lula discussed expanding cooperation in the sector in Manila. In September, officials from Brazil’s National Mining Agency and Natural Resources Canada had already met to explore work on innovation, technical training and regulation. That gives the leaders’ discussion an institutional starting point beyond a single diplomatic meeting.
Brazil is simultaneously reshaping its mineral policy. In November, a national council approved a priority list that included rare earths, lithium, graphite, nickel and cobalt. The country’s new policy emphasizes processing and industrial development at home, rather than relying only on exports of unprocessed minerals. For Canadian mining companies, that creates opportunities as well as expectations. Equipment, expertise and investment may be welcomed, but partnerships will need to demonstrate how Brazilian communities and industries benefit from the value created.
Billions in Existing Investments Give Both Countries a Head Start
Investment ties suggest the relationship is deeper than the containers in ports. Canadian government data put Canada’s stock of direct investment in Brazil at C$24.6 billion in 2025, up 25% from the previous year. Brazil’s direct investment stock in Canada, measured by ultimate investor country, reached C$14.3 billion. These are accumulated investment positions, not fresh Manila commitments, but show that companies on both sides already have a financial stake in one another’s economies.
The governments have also been adding practical building blocks. During a July 2026 strategic dialogue, Canada announced that FinDev Canada had finalized two sustainable-infrastructure investments in Brazil worth about C$125 million. The countries signed an agreement to improve cooperation between customs authorities, while discussing energy, science, technology and mining. Such measures attract less attention than presidential promises. Yet clearer procedures, finance and established cross-border business relationships can make expansion more realistic for firms deciding where to invest.
Canada’s $560 Million Forest Commitment Adds Another Dimension
Trade was not Manila’s only announcement. Carney pledged an initial contribution of up to C$560 million over four years to the Tropical Forest Forever Facility, an initiative co-led by Brazil and Norway. It aims to attract public and private capital, using investment returns to reward countries protecting tropical forests. This is climate financing, not merchandise trade, but creates a highly visible shared international project.
Canada says the facility is designed, once fully operational, to support the protection of more than one billion hectares of tropical forests annually across over 70 countries. At least 20% of conservation payments are intended for Indigenous peoples and local communities. That structure recognizes that protecting ecosystems also involves people who depend on them. The Canadian commitment does not guarantee that every fundraising target or conservation outcome will be achieved. It does, however, show the kind of cooperation the leaders can pursue outside conventional trade negotiations.
Carney’s Trade Diversification Strategy Gives Brazil New Importance
Canada has its own reasons to cultivate stronger ties with Brazil. According to federal trade data, the United States purchased C$564.6 billion of Canada’s C$779 billion in merchandise exports in 2025, roughly 72% of the total. That concentration makes disputes over American tariffs consequential for Canadian producers. Carney has made doubling exports to markets outside the United States by 2035 a central national economic policy goal, while continuing negotiations with Washington.
In Manila, the prime minister announced that Canada had substantially completed free-trade negotiations with ASEAN and concluded separate negotiations with the Philippines. Those agreements still require additional steps before taking effect, with signatures targeted for 2027. The Brazil initiative fits the same broader strategy: building a more diversified customer base without pretending the United States can be replaced overnight. For Canadian businesses, more markets could strengthen negotiating power and reduce exposure when one border suddenly becomes harder to cross.
Planned 2027 Visits Could Determine Whether the Trade Goal Becomes Reality
The real test now is whether diplomatic enthusiasm produces useful, practical decisions. Lula said he had invited Carney to Brazil during the first quarter of 2027 and planned to visit Canada in the second quarter. Brazilian reporting also described plans for visits accompanied by business delegations. Those meetings could turn aspirations into discussions about products, investments and trade rules.
Doubling commerce is harder than setting a target. The governments have not announced a binding bilateral trade-volume commitment, and the Canada-Mercosur agreement remains unfinished. Exporters would need dependable access, competitive prices and efficient customs procedures, while investors would seek certainty about regulations and commercial returns. A surge in one commodity’s price could raise the headline trade figure without creating an equally broad economic benefit. Lula’s challenge now is to turn his rejection of tariff pressure into enduring partnerships. Canada’s is to make sure the expanded relationship delivers opportunities on both sides.
