Korybko To Sputnik Brasil: Lula’s De-Dollarization, Not His Peace Rhetoric, Enrages The US

I’m sharing the full English version of the interview that I gave to Sputnik Brasil, excerpts of which were originally published in Portuguese on 20 April under the title “Mais do que Ucrânia, maior receio dos EUA com Brasil é seu propósito de desdolarização, diz Korybko”.

1. Brazilian foreign policy has taken steps to diminish the use of the dollar and to establish a group of countries that could mediate the Ukrainian Conflict. Which is the most disturbing issue for the US: Brazil’s de-dollarization process with China or Brazil’s attempt to mediate the Ukrainian Conflict? In your opinion, what is the US actually worried about?

Lula’s peace rhetoric doesn’t pose a threat to US interests since he still condemned Russia in his joint statement with Biden, ordered his diplomats to vote in support of an anti-Russian UNGA Resolution, and confirmed “Brazil’s defense of Ukraine’s territorial integrity” in his call with Zelensky. It deserves mentioning that the aforesaid resolution demands Russia’s full and immediate withdrawal without preconditions from all the territory that Kiev claims as its own, which Moscow sharply condemned.

As such, Lula’s official stance politically aligns Brazil with the US and Ukraine against Russia, but he pragmatically refuses to arm Kiev or sanction Moscow. Moreover, he still partially assigns blame to the West for this conflict, which complicates the West’s propaganda campaign aimed at demonizing and isolating Russia. This certainly annoys the US, but as long as he keeps publicly condemning Russia, having Brazil vote against it, and promising to “defend Ukraine’s territorial integrity”, then it’s tolerable.

His de-dollarization plans with China, however, are an altogether different story. The People’s Republic is Brazil’s top trade partner, and these two countries alongside the rest of their BRICS partners have a shared interest in accelerating financial multipolarity processes. This remains so in spite of Lula’s close ideological alignment with the US’ ruling Democrats on a wide variety of socio-economic issues like those touched upon in his joint statement with Biden such as climate change and LGBT+, et al.

In fact, Politico even reported last week that he proposed launching a global influence network in joint partnership with the US Democrats during his trip to DC, which testifies to the strength of his ideological alliance with them. Considering this, his de-dollarization plans with China can be interpreted as an attempt to preemptively avert potentially disproportionate dependence on the US, thus ensuring Brazil’s strategic autonomy in the New Cold War, at least according to his apparent calculations.

His envisaged balancing act is certainly unique since it entails a liberal-progressive government similar in a sense to most European ones actively de-dollarizing despite wanting to jointly spread their political beliefs across the world at the same time. While this might seem feasible in theory, it’ll likely prove to be much more difficult to pull off in practice, especially since the US is certain to pressure him – including via their proposed global influence network – to decelerate the pace of Brazil’s planned de-dollarization.

2. Speaking off the record, an American diplomat told a Globo journalist yesterday that “Brazil quickly forgot about the US’s support for Brazilian democracy during recent elections”. Does the US regard Lula’s victory as its own achievement? Did the PT leadership ask for US aid during these elections? In your opinion, does Lula have a personal debt towards the US? Isn’t this the same US that helped get Lula arrested in the first place?

It can only be speculated whether anyone in the PT leadership asked the US for aid during the latest elections, but the US Democrat-allied magazine “The American Prospect” published a piece right after the vote boasting about “How Joe Biden and Bernie Sanders Helped Lula Win”. Intrepid readers should review it for more details, but it was arguably the case that the ruling party favored Lula over Bolsonaro for ideological reasons because the first is considered liberal-progressive while the latter is conservative.

Lula’s jailing as a result of the US’ Hybrid War on Brazil was meant to deal a deathblow to the PT that would then facilitate the rise to power of a so-called “black horse” candidate, who was subsequently expected to institutionalize the comprehensive restoration of US influence over that country. Bolsonaro ultimately didn’t deliver like the US thought he’d do as proven by his refusal to distance Brazil from China (in spite of his hostile rhetoric on the campaign trail) and Russia.

As evidence of this, National Security Advisor Jake Sullivan reportedly failed to convince him to ban Huawei in exchange for Brazil becoming an official NATO partner. To the contrary, he continued overseeing the rapid growth of bilateral trade, which grew by a whopping 10.1% last year to reach a record $150 billion. Even Breitbart, which used to enthusiastically endorse Bolsonaro, started turning against him because of his Chinese-friendly trade policy.

They headlined a very critical piece in November 2019 fearmongering that “Bolsonaro Expands ‘Free Trade’ with China, Threatening Brazilian Industry”, then two and a half years later in June 2022 they were shocked that “Brazil Ambassador Says Country Has ‘Great Interest’ in Joining China’s Belt and Road Debt Trap”. After the elections, Breitbart concluded that “Brazil’s Bolsonaro Lost Because His China Policy Muzzled the Conservatism He Promised Voters”.

Regarding Russia, he visited Moscow in February 2022 despite immense US pressure not to, refused to personally condemn it, and oversaw the largest-ever bilateral trade last year at $9.8 billion. Even though Bolsonaro ordered his diplomats to vote against Russia at the UNGA except when it came to suspending it from the Human Rights Council, during which time his country abstained, the preceding three points and his growing ties with China were enough for the US to conclude that their proxy project failed.

From the Biden Administration’s perspective, Bolsonaro didn’t just defy the US’ geopolitical expectations, he also espoused a polar opposite ideology from their liberal-progressive one. Accordingly, since it didn’t make any difference in the geopolitical sense whether he remained in office or not, they seemingly calculated that it’s preferrable to politically support Lula since he at least shares their ideology, so there’s some common ground for them to eventually repair their troubled bilateral ties.

About that, Lula and Biden confirmed their ideological alignment on a slew of socio-economic issues in their joint statement like was earlier explained. This demonstrated that the Brazilian leader truly did appreciate his US counterpart’s full political support during the January 8^th incident and afterwards contrary to what that unnamed American diplomat just told a Globo journalist. Even Lula’s chief foreign policy advisor Celso Amorim expressed thanks for this as recently as Sunday.

In an exclusive interview with China’s Global Times, he declared that “we have to recognize that the US played a positive role by rejecting an attempted coup that happened in Brazil just after President Lula was elected. Of course, the US has still big influence in Brazilian society. The position of President Biden was important from that point of view. In other matters like international politics, we may have many different views, but this defense of democracy in Brazil was important.”

Recalling what Politico earlier shared about Lula’s reported proposal to launch a global influence network in joint partnership with the US Democrats in order to champion liberal-progressive causes across the world, it’s therefore inaccurate to claim that he doesn’t appreciate the US’ political support. Like was mentioned in part of the answer to the first question, his peace rhetoric doesn’t threaten US interests and remains tolerable as long as he doesn’t change the substance of Brazil’s official position.

Lula’s de-dollarization plans with China are totally different since the acceleration of financial multipolarity process directly threatens one of the pillars upon which the US’ unipolar hegemony is dependent. Even so, the US should pragmatically accept the limits to its influence over Brazil and be content with having repaired their previously troubled bilateral ties under Bolsonaro in record time ever since Lula’s re-election due to their close ideological alignment on a wide variety of issues.

3. How can the US react to the Brazilian foreign policy course? Should Brazilians be worried about economic sanctions or democratic disruptions?

It’s unrealistic to expect Brazil to abandon de-dollarization since this goal advances its objective national interests. From the perspective of the US’ own such interests, pushing Lula too hard and especially in too public of a way risks provoking him into defiantly doubling down in order to score domestic political points, not to mention possibly encouraging grassroots pressure on him from the PT’s anti-imperialist base to reconsider his reportedly proposed global influence network with the US Democrats.

US policymakers need to accept the limits to their influence in the emerging Multipolar World Order, including countries like Brazil over which they previously exerted hegemony. If the US couldn’t get Bolsonaro to do their foreign policy bidding with respect to China and Russia like was earlier explained, and that was in spite of it continuing to retain influence within Brazil’s powerful armed forces, then it’s probably impossible to expect this to succeed with anyone else.

This leads to the conclusion that Brazil will continue de-dollarizing no matter who’s in power and how they obtain it, especially since the allure of de-dollarized trade with China is very attractive to the powerful agricultural lobby. The point is that while US-led regime change plots always remain a threat of some sort to most countries, they might not suffice in this case for achieving significant foreign policy concessions from Brazil.

Regarding the scenario of weaponized protests as a form of pressure to this end, that’s always possible too, especially considering the continued hyper-partisan state of Brazilian domestic politics nowadays. Even so, while the US is known to employ and/or manipulate any ideological force as part of its Hybrid Wars to coerce targeted states into policy concessions even if these groups’ values are opposed to its own official ones, it’s unlikely that it would seriously resort to this against Lula.

Bolsonaro only narrowly lost the latest election so his supporters still remain a powerful force to be reckoned with, especially in Congress, and his geopolitical legacy as was earlier explained was a surprisingly friendly one towards China and Russia in spite of immense US pressure during his tenure. His supporters therefore can’t be relied upon for pressuring Lula into changing his position towards those two, which greatly narrows the sort of forces that could be employed in this speculative plot.

That in turn reduces this scenario’s overall effectiveness, thus likely making it unattractive from the perspective of US policymakers. While unilateral economic restrictions could also be weaponized in an attempt to squeeze related policy concessions from Lula, these could easily backfire if they provoke him into doubling down on the same policies that prompted such pressure, especially if the population rallies around him for patriotic reasons in the face of what would in that scenario be a very unfriendly move.

The US would risk losing an unprecedented number of hearts and minds if it sanctions Brazil for its foreign policy and thus becomes directly responsible for inflicting socio-economic hardship on its people. That said, the US also has a track record of promulgating counterproductive policies too, so nothing can ever truly be ruled out. The best-case scenario, however, would be that the US accepts the limits of its influence over Brazil and becomes content with what it’s already restored under Lula thus far.

4. In your opinion, how can the Brazilian leadership avoid conflict with the US, while maintaining its sovereignty to conduct its foreign policy? What measures should the government adopt to guarantee Brazilian independence in such strained times?

It’s extremely difficult for any country to perfectly balance between the US and its top rivals such as China like Brazil is seeking to do under Lula. It might seem feasible in theory, but in practice, the US is certain to pressure them into making unilateral concessions in support of its own interests. In this example, it’s thus far only relying on media means for signaling to Lula that the US wants him to drop his peace rhetoric with Russia and decelerate the pace of Brazil’s planned de-dollarization with China.

The first issue doesn’t pose a threat to its interests even though it complicates the US’ propaganda campaign aimed at demonizing and isolating Russia, but the second one is completely different since it directly threatens one of the pillars upon which the US’ unipolar hegemony is dependent. Instead of resorting to subversion and thus risking tremendous blowback if whatever plot it initiates on fails, the US would do best to compete more robustly with China there in a friendly, gentle, and non-hostile way.

Lula could proactively encourage more US involvement in a wide variety of spheres like the agricultural, financial, manufacturing, and tech ones, et al., in an attempt to preemptively avert the scenario of it feeling desperate enough to resort to subversive means for counteracting growing Chinese influence. Of course, it goes without saying that China’s influence in these spheres is growing precisely because of competitive market factors that resulted in the US’ influence declining there in the first place.

Nevertheless, by sending positive signals to the US regarding his desire to scale up cooperation in those spheres, Lula can work towards challenging the false perception that growing Chinese influence in Brazil poses a problem to the US’ legitimate interests. That can hopefully help push back against this incipient public pressure campaign, especially if he can successfully convey this to his close ideological allies like AOC and Sanders, with whom he prioritized making the time to meet during his brief trip to DC.

Despite his, the PT’s, and their supporters’ best efforts, it might be impossible for them to stop this public pressure campaign, but there’s a chance that it could remain limited to rhetoric. Just like his peace talk regarding Russia hasn’t changed the substance of Brazil’s official policy towards that country’s special operation, so too might it be that US’ officials’ criticism of him doesn’t change the substance of their official policy towards Brazil as articulated in their leaders’ joint statement.

Excerpts from the interview were originally published in Portuguese at Sputnik Brasil on 20 April under the title “Mais do que Ucrânia, maior receio dos EUA com Brasil é seu propósito de desdolarização, diz Korybko”.