By Marcela Ayres
BRASILIA, July 2 (Reuters) - Senator Flavio Bolsonaro, President Luiz Inacio Lula da Silva's main rival ahead of Brazil's October presidential election, has proposed barring the country's digital payment system Pix from integration with non-Western cross-border settlement systems, arguing the move would help ease U.S. concerns over the country's hugely popular instant-payment platform.
Bolsonaro made the case to the Office of the U.S. Trade Representative (USTR) on Wednesday after
the agency last year included Pix among practices under investigation as potentially unfair trade barriers.
The probe culminated in a proposal to impose 25% tariffs on a range of Brazilian goods, with a decision due this month.
If connected to foreign payment systems, Pix could, in theory, reduce reliance on the U.S. dollar and bypass intermediaries such as credit card companies that currently handle a large share of cross-border transactions, developments that run counter to the interests of U.S. President Donald Trump's administration.
In a post on X, Lula, who has long advocated reducing reliance on the U.S. dollar in international trade and promoting deeper financial integration among developing economies, described Senator Bolsonaro's proposal as an attempt to "hand Pix over to foreign interests."
"They won't succeed. Pix is a Brazilian achievement and we will not give it up," he wrote.
In written comments submitted in a public consultation launched by the USTR, Bolsonaro defended Pix against criticism that Brazil's central bank acts both as owner and operator of the system.
He argued tariffs would be the wrong remedy because they do not address Pix's architecture and would hurt U.S. investment interests.
Instead, he said, a "decisive signal" to Washington would be legislation ensuring Pix is not interconnected with non-Western cross-border settlement arrangements.
More broadly, he urged Washington not to impose tariffs on Brazil, arguing the dispute has boosted Lula's popularity.
Launched in late 2020 during the administration of his father, former President Jair Bolsonaro, Pix quickly became the most widely used payment method in Latin America's largest economy, overtaking credit and debit cards while sharply reducing the use of cash.
(Reporting by Marcela Ayres; Editing by Aurora Ellis)
