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Brazil and Argentina downgrade ties after Milei calls Lula a thief

Brazil and Argentina downgrade ties after Milei calls Lula a thief
Politics · 2026
Photo · Anna Schroeder for European Pulse
By Anna Schroeder Brussels Bureau Chief Aug 5, 2026 3 min read

Brazil has formally requested the recall of Argentina's ambassador and reduced diplomatic representation to chargé d'affaires level, the Argentine Foreign Ministry confirmed on Tuesday. The escalation follows a televised interview in which Argentine President Javier Milei called his Brazilian counterpart Luiz Inácio Lula da Silva a "thief" and "corrupt."

During an interview on the Argentine channel LN+, Milei said: "He's a thief, he's corrupt, he's been convicted of theft and corruption, he's been in prison, so it's true that we can call him a convict." The remarks were part of a broader attack that also targeted a Brazilian Supreme Court justice.

In response, Brazil's government announced it was reducing "bilateral diplomatic representation to the level of chargé d'affaires," according to a statement from the Argentine Foreign Ministry. Brazil also recalled its own ambassador from Buenos Aires for consultations.

Buenos Aires plays down the rift

Argentina's presidential spokesperson, Adrián Ravier, sought to minimize the fallout, describing the dispute as a matter of "ideological and political differences" rather than a rupture in relations. Argentina and Brazil are each other's largest trading partners in South America, and the diplomatic downgrade could have economic implications.

Milei, a self-described libertarian, defended his language when asked about his aggression toward Lula. "Don't you think it's aggressive when someone steals from you? Calling a thief a 'thief' is far less serious than the act of stealing itself," he said. He also insisted that Lula's release from prison was due to an "administrative error," not innocence, and repeated his characterization of the Brazilian leader as a "thief and corrupt official."

The Argentine leader made similar comments during a visit to Brazil last weekend, where he voiced support for Senator Flávio Bolsonaro, son of former president Jair Bolsonaro and a likely right-wing challenger to Lula in the upcoming presidential election. Flávio Bolsonaro has also received backing from members of the Trump administration and Israeli Prime Minister Benjamin Netanyahu.

The diplomatic spat comes at a delicate moment for regional politics. Lula is preparing for a re-election bid, and the clash with Bolsonaro's camp is expected to dominate Brazilian politics. The downgrade in relations between Brasília and Buenos Aires could complicate Mercosur trade negotiations and broader South American integration efforts.

European observers are watching the situation closely, as the EU has been seeking to finalize a long-delayed trade agreement with Mercosur. A deterioration in Brazil-Argentina relations could affect the bloc's trade strategy with Latin America. The EU's interest in the region has been underscored by recent diplomatic efforts, including high-level meetings involving international leaders.

Analysts note that Milei's confrontational style has already strained ties with several countries, including Spain, where his remarks about the Spanish prime minister's wife led to a diplomatic incident earlier this year. The latest dispute with Brazil, however, is more consequential given the economic interdependence between the two neighbors.

Brazil's decision to downgrade representation is a significant step, but it stops short of a full break in diplomatic relations. Both countries have embassies in each other's capitals, and trade continues to flow. The chargé d'affaires will handle day-to-day diplomatic functions, but the absence of an ambassador signals a cooling of relations.

The situation remains fluid, and it is unclear whether Milei will soften his rhetoric or whether Lula will respond with further measures. For now, the two largest economies in South America are locked in a diplomatic standoff that could have ripple effects across the region and beyond.

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