U.S. government support for the coup

Kennedy greeting Goulart during his visit to the US, 1962.

Though never admitted by the U.S. government, the U.S. secretly provided arms and other support for the military coup plotters. U.S. government documents released on March 31, 2004, the 40th anniversary of the Brazilian coup, expose the U.S. role. An audio tape released that day, for instance, showed American President Lyndon B. Johnson (1963–1969) instructing his aides in Brazil with these words: "I think we ought to take every step that we can, be prepared to do everything that we need to do." Johnson's predecessor John F. Kennedy (1961-1963), who was killed in 1963, had discussed overthrowing Goulart's government in July 1962 two years before the coup. Officials in the Kennedy administration strategized on how to support a coup against Goulart or pressure him to remove leftists from his government and alter his foreign policy.^[8] U.S. ambassador to Brazil, Lincoln Gordon, a holdover from the Kennedy Administration, was perhaps the most enthusiastic pro-coup U.S. authority. Lincoln and chief Latin American advisor Richard N. Goodwin had a meeting with President when preparations for the coup began in July 1962.^[8] US Attorney General Robert F. Kennedy, another Kennedy Administration holdover and brother to the late President, was also highly enthusiastic about the coup. An audio tape released on the 50th anniversary of the coup in 2014 revealed that Robert Kennedy had characterized Goulart as a "wily" politician" who "figures he's got us by the ass."^[8]

Four days prior to the coup, Gordon wrote Central Intelligence Agency agents in detailing how the U.S. should help the plotters: "If our influence is to be brought to bear to help avert a major disaster here—which might make Brazil the China of the 1960s—this is where both I and all my senior advisors believe our support should be placed." To assure the success of the coup, Gordon recommended "that measures be taken soonest to prepare for a clandestine delivery of arms of non-US origin, to be made available to Castello Branco supporters in Sao Paulo." In a subsequent cable, declassified February 2004, Gordon suggested that these weapons be "pre-positioned prior any outbreak of violence," to be used by paramilitary units and "friendly military against hostile military if necessary." To conceal the U.S. role, Gordon recommended the arms be delivered via "unmarked submarine to be off-loaded at night in isolated shore spots in state of Sao Paulo south of Santos."^[9]

In 2001, Gordon published a book—Brazil's second chance: en route toward the first world—on Brazilian history since the military coup. In it he denied his role in the affair. On Gordon's importance for the coup movement, however, James N. Green, an American Brazilianist, said in an interview with a Brazilian website: "[Gordon] changed Brazil's history, for he gave green light so the military advanced the coup in 1964. He made it clear that, if the coup was advanced, the United States was going to recognize it immediately, which was fundamental [to the plotters]."^[10] Media outlets, both in Brazil and the U.S., hailed the coup.^[11]

The U.S. immediately recognized the new interim government. At the day of the coup a United States naval task force was anchored close to the port of Vitória. The Johnson administration (and the International Monetary Fund) made large loans to the new Castelo Branco government (1964–67).

U.S. government relations with the military government

The new military president adopted a policy of almost total alignment with the United States. "What is good for the United States, is good for Brazil", asserted General Juracy Magalhães, the Minister of Foreign Relations of the Castelo Branco administration. In accordance with this thought, Castelo Branco took a series of pro-American policies in both the foreign and domestic agendas: in 1964 he cut ties with Cuba and China; in 1965 he sent troops to Santo Domingo in support for the United States occupation of the Dominican Republic; he opposed the creation, proposed by Chile, of a Latin American trade area that would exclude the U.S.; and defended the creation of an Inter-American Peace Force, a Pan-American military force that would be made up of military contingents of all countries in the Americas. The force would be headed by the Organization of American States, and its main function would be to intervene in any nation of the region where there was danger of a leftist revolution.

In forming his economic team, Castelo Branco took to heart the advice that had been given to him by American officials. This, one sees in his indication for the Planning Ministry of Roberto Campos, a U.S.-educated monetarist economist. Together with the Minister of Finances Otávio Bulhões, Campos implemented reforms to both reduce inflation and make the Brazilian environment more open to foreign capital. Those included: public spending cuts, tax hikes on consumers and wage-freezing to lower inflation; massive privatizations; elimination of restriction on capital remittances to foreign banks; tax cuts to multinational profits; and the pulling out of subsidies and legislation that shielded national industries from foreign competition.

From 82% in 1963, annual inflation fell to 22.5% in 1967. In 1966, the budget deficit stood at 1.1% of GDP, from 3.2% in 1964. Therefore, if one takes into account the aims of such economic policies, then they can be thought of as effective. But they were unpopular with both the broader society and the nationalistic sectors of the military. The latter accused the economic team of being sellouts (entreguistas) bent on destroying national industries and delivering the country to U.S. Multinationals. Such accusations often appeared in the Brazilian press, which went mostly uncensored during the 1964–1967 period. The public attributed to the American government an immense political clout over the Brazilian regime, an impression encapsulated in a mock-campaign commenced by a humorist, Otto Lara Resende, whose motto was: "Enough with middlemen—Lincoln Gordon for president!" Gordon himself complained that American advisors were implicated in "almost every unpopular decision concerning taxes, salaries and prices."

The social consequences of such economic plan, the PAEG, were negative. Though inflation had been reduced, it was still high for international standards. And in combination with the wage-freezing policies, it caused Brazilians' real income to fall sharply—by about 25%—from 1963 to 1967. As a consequence, malnutrition and infant mortality rose. The Brazilian industrial elite, too, began to turn on the government; not only it had been hurt by the sudden market opening, but also the monetary tightening applied under the PAEG had dried out credit and induced a recession in output.

The overall failure of such reforms; the increased opposition faced by the Castelo Branco administration, even among sectors that had previously supported it; its closeness with the U.S. government; and its perceived leniency in combatting "subversive" leftists: all this led to the ascension, after Castelo Branco's death, of a different set of rulers, one that would alter Brazil's political and economic path and its relations with the U.S.

Presidents Emílio Médici and Richard Nixon at the White House, December 7, 1971.

After his death in 1967, Castelo Branco was succeeded by General Artur da Costa e Silva. Costa e Silva received support from Brazilian industrialists and from the nationalist wing of the military, a more numerous sector than the castellistas, the Castelo Branco supporters. It is rumored that, even before Costa e Silva took office, he demanded from U.S. ambassador Lincoln Gordon that he leave Brazil before the general assumed the presidency. This was provoked by an alleged attempt by Gordon to persuade Costa e Silva not to alter Castelo Branco's economic policies and re-establish the statist, developmentalist policies previously imposed by civilian former presidents. Gordon was replaced by Ambassador John W. Tuthill. With a green light from the U.S. State Department, Tuthill put into practice Operation Topsy, a procedure intended to reduce the American personnel employed in the U.S. Embassy in Brasília. As he explained in an article published in a 1972 edition of the Foreign Policy magazine, the "omnipresen[ce]" of the American embassy employee in the Brazilian political scene had become a cause of irritation among the increasingly anti-American populace and the Brazilian military, which had indicated, since Costa e Silva replaced Castelo Branco, that the country would follow its own strategy in political and economic matters.^[12]

On the most part the Nixon administration (1969–73) remained positive to the Brazilian dictatorship. High growth during the Costa e Silva and Médici years excited Brazilian nationalistic hopes for a greater international role—hopes of which the U.S. was supportive, for Brazil was still considered to be one of the developing nations most sympathetic to the United States. There was, however, a cooling on both sides. On the U.S. side this was due to fears of being linked with its ally's abuses. It also distressed the U.S. the increased kidnapping risks that its ambassadors and diplomats faced in Brazilian territory during those years. The Médici tactics of suppression against leftist activists were provoked by the acts of urban socialist guerrillas that began to blossom after the 1964 coup. One of the favorite targets of such groups were U.S. diplomats.

As for the Brazilian side, the cooling had to do with many factors. One of them was the Vietnam War and the coming, but already clear, U.S. defeat, an event that would facilitate reducing co-operation with the North American nation. Other factors were:

• the intention to increase the country's profile by forging new partnerships and the insertion of new values in its foreign policy. The Brazilian government had hopes of playing a larger international role. That, the nationalists believed should be accomplished by becoming a leader among developing nations. To do that, Brazil had to loosen its ties with the capitalist superpower and the developed world in general. "Third Worldism" was a trademark of the Foreign Ministry rhetoric. A greater rapprochement with Africa and the Middle East was sought. At multilateral economic fora the Brazilian diplomacy, seeking to advance its economic interests as a developing country, acted in synergy with India and the broader Non-Aligned Movement in adopting a revisionist stance towards the rich nations. Non-interventionism was inserted as a key value in Brazil's foreign policy—not only as a means of pandering to other developing nations, but also to shield Brazil itself from criticism regarding its domestic politics. As a result, it began to oppose the re-creation of the Inter-American Peace Force (which had disbanded by 1967).
• The nuclear proliferation issue. Brazil refused to sign the Nuclear Non-Proliferation Treaty (NPT). It argued that the treaty was discriminatory for it unjustifiably divided the world into two different kinds of nations: first, the countries that could be trusted to use their weapons responsibly. These were exactly the same countries that by then had already established themselves as nuclear weapon states: the United States, the Soviet Union, the United Kingdom, France, and China. And second, there was the rest of the world, the countries that would have to give up the possibility of developing nuclear technology and enriching uranium on their own. The Brazilian government wound up rejecting the NPT as an infringement against sovereignty.

Despite this, while even most European nations, such as Great Britain and France refused to do so, Brazil was one of the few Western nations to vote alongside the United States against the People's Republic of China joining the United Nations, in support of U.S. ally the Republic of China in the UN General Assembly Resolution 2758 of 1971.^[13]

Ernesto Geisel (center) with Jimmy Carter and First Lady Rosalynn Carter at the Palácio da Alvorada, March 29, 1978.

The Geisel administration (1974–79) marked a definite cooling of Brazilian–American relations. As the United States began to apply high tariffs on Brazilian manufactured goods, Ernesto Geisel looked for new trade partners. These, he would seek mostly in other Third World nations (in Africa, for instance). But in contrast with Costa e Silva and Médici, Geisel commenced to reach out to Communist countries, too. In 1975, four years before the U.S., Brazil reestablished diplomatic ties with China. It promptly recognized the independence of fellow Portuguese-speaking Angola and Mozambique, two African countries whose independence from Portuguese rule had been brought about by socialist revolutions aided by Cuba and the Soviet Union. In 1975, Brazil voted in favor of Resolution 3379, a U.N. resolution sponsored by Muslim nations which equaled Zionism with racism. Only two other Latin American countries—Cuba and Mexico—had voted in favor of the bill. In supporting it at the expense of Israel, already then a major U.S. ally, Brazil's intention was to seek closer relations with oil-rich Arab nations. By then Brazil imported 80% of the oil it consumed. As such it had been greatly affected by the 1973 oil crisis, an event which had a tremendously negative impact on Brazil's current account and posed a major threat against its fast growth during the Médici years.

As the Carter administration replaced that of Gerald Ford, two other very sensitive issues—human rights and nuclear proliferation—came to the front in the relations between the U.S. government and Brazil.

In 1975 Brazil and Western Germany established an agreement of co-operation in nuclear energy for peaceful purposes. The agreement was to transfer to Brazil the whole cycle of nuclear generation and a factory of nuclear reactors. The factory would enable the independent production of nuclear reactors as soon as 1978.

The United States opposed the agreement. In March 1977, Jimmy Carter took measures against both Brazil and Germany: he pressed two American banks, the Chase Manhattan Bank and the Eximbank, to suspend all financing activities negotiated with Brazil, and halted the supply of enriched uranium to Germany. He wanted to compel both countries to either renounce the agreement or to revise it so as to give space to the introduction of comprehensive safeguards similar to those established by the NPT. He also wanted the construction of the nuclear reactor factories to be canceled.

Presidents Ronald Reagan and João Figueiredo riding horses in Brasília, Brazil, December 1, 1982.

In the early 1980s, tension in the American–Brazilian relations centered on economic questions. Retaliation for unfair trade practices loomed on the horizon and threatened Brazilian exports of steel, orange juice, commuter aircraft, shoes and textiles. When President Sarney took office in 1985, political issues, such as Brazil's arms exports to Libya and Iran, again surfaced. Brazil's foreign debt moratorium and its refusal to sign the Non-Proliferation Treaty caused the United States to put Brazil on its mandated blacklist, thereby restricting Brazil's access to certain U.S. technologies.

End of Cold War; return to democracy in Brazil

On taking office in March 1990 President Collor sought a quick rapprochement with the United States in order to begin an aggressive policy of inserting Brazil into the world economy and placing it at the negotiating table of world powers. The Franco administration maintained an independent stance and reacted coolly to proposals by the Clinton administration for a Latin American free-trade zone.

Reaction

Michael Shifter, president of the Inter-American Dialogue, considered the revelations "a major blow for the effort to increase trust between the two nations," and added that the "Brazil–U.S. relationship was under threat."^[41]

Addressing the opening session of the UN General Assembly in September 2014, Rousseff strongly criticized the U.S. strategy of forming an international coalition to counter with military strikes the advances of the Islamic State in Iraq and Syria (ISIS), urging negotiation rather than force. This stance, and Brazil's silence in face of the Russian invasion and annexation of Crimea may make less likely the chances that Brazil will achieve its long-standing desire to win a permanent seat on the U.N. Security Council.^[46]

In June 2015, President Barack Obama and Brazilian President Rousseff met nearly two years after Rousseff canceled a rare state visit to Washington following revelations that Brazil was a target of American spy programs. U.S. was looking for bilateral trade and investment since China has overtaken the U.S. as Brazil's largest trading partner. Rousseff traveled to New York to meet with investment bankers and to Silicon Valley to drum up business for Brazil's information technology industry. Relations between the U.S. and Brazil have since improved, and indeed the U.S. remains the leading investor in Brazil both in FDI and in number of M&A transactions ^{[47][48][49][50]}