Trade tensions shake up Brazil's caipirinha spirit

Here is the latest breaking news from around the world: The Americas Trade tensions shake up Brazil's caipirinha spirit Updated June 28, 202611:45 AM ET Originally published June 28, 202611:45 AM ET By Catherine Osborn Bartender Rafaella Demelo adds sugar, 1. 5 ounces of Leblon, and half a lime over ice in a shaker while preparing a caipirinha, Brazil's trademark cocktail. Alan Diaz/AP hide caption toggle caption Alan Diaz/AP RIO DE JANEIRO, Brazil—The Trump administration's tariffs may have done what decades of diplomacy couldn't: convince Europe and South America they needed each other.

For Brazil's cachaça makers, that diplomatic shift is already becoming a business opportunity. "I think growth will be immense," distiller Assja Schymura of Pindorama, said. "If we can only get over these initial barriers.

The Details

" Cachaça, Brazil's sugarcane-based liquor and the key ingredient in the country's famed cocktail, the caipirinha, has won awards in European competitions but has long struggled to break into the market. Import taxes and lack of familiarity kept it mostly a niche export. Producers now see a chance to change that.

Sponsor Message In May, the European Union and Mercosur— a South American trade bloc known as the "Southern Common Market" that includes Brazil, Argentina, Uruguay, and Paraguay — finally advanced a long-delayed trade agreement, cutting tariffs on hundreds of goods from airplane parts to cachaça. Bolivia, which became a Mercosur member after most of the deal was already negotiated, is expected to join it in the next few years. The countries moved past decades of stalling to sign the deal after both sides were hit with U.

Unpredictable relations with the United States "tends to lead to seeking additional partners to make up for that," former Brazilian trade official and diplomat Roberto Jaguaribe said. The EU-Mercosur agreement goes beyond just trade. It also commits members to uphold democratic institutions and remain in the Paris climate agreement—commitments European and South American officials say matter more as Washington steps back from global climate and democracy initiatives under the Trump administration.

What Experts Say

That shift in relations has given a new momentum to other talks. At a conference in Brazil this month on strengthening ties between Europe and Latin America, Finnish diplomat Anna-Kaisa Heikkinen argued that countries committed to the rules-based international order "need to get our act together. " Sponsor Message Despite the conference's harmonious tone, South America and Europe still have some disagreements on trade.

European lawmakers representing agricultural regions worry it could expose farmers to cheaper imports and sent the agreement to the EU Court of Justice for review in January. That means a ruling in the next two years or so could lead to changes in the agreement. Mercosur's new openness to trade goes beyond just the EU deal, however.

It has rushed to negotiate other trade pacts since Trump took office.

The development has drawn wide international attention, with diplomatic circles watching closely.