Germany and Brazil have agreed to significantly deepen their strategic partnership, with rare earth metals, defence contracts and supply chain diversification at the heart of a new bilateral framework unveiled following government consultations in Hanover.
German Chancellor Friedrich Merz said he hoped to double the volume of trade with Brazil in the coming years, describing the relationship as a critical hedge against global supply chain vulnerability at a moment of fundamental geopolitical change. “The closeness between our two countries is more necessary than ever at a time when the world order is changing so fundamentally,” Merz said at a joint press conference with Brazilian President Luiz Inácio Lula da Silva.
Rare earth metals — essential inputs for laptops, mobile phones and the electric motors used in wind turbines — are a central pillar of the agreement, as Germany and the broader European Union seek to reduce a deep dependency on Asian, and particularly Chinese, supply chains. The two governments also agreed to expand cooperation in artificial intelligence, energy, the circular economy, environmental technologies, agriculture and the defence sector.
Lula was emphatic that the partnership would not replicate historical patterns of resource extraction without industrial benefit for Brazil. “We will not accept models that reduce our country to resource extraction simply to satisfy foreign demand,” he said, framing the agreement as a bidirectional industrial partnership rather than a supplier-client arrangement. The Brazilian president’s remarks reflect a broader posture among resource-rich emerging economies that are increasingly seeking to capture processing and manufacturing value from their natural endowments rather than exporting raw materials alone.
Both leaders welcomed the EU-Mercosur free trade agreement, an interim version of which enters into force on 1 May ahead of full ratification of the main deal — a framework that provides the commercial scaffolding for the expanded bilateral relationship. The German economy ministry and European wind industry developed a roadmap last year for reducing the bloc’s reliance on rare earth metals in wind turbines, and Brazil’s resources position it as a potentially significant contributor to that effort. Canada has also moved to position itself as a rare earth supplier to Europe, intensifying competition for the supply agreements Germany is now actively pursuing across multiple continents.
