Origins

In April 1500, Brazil was claimed by Portugal on the arrival of the Portuguese fleet commanded by Pedro Álvares Cabral.^[5] Until 1530 Portugal had yet to establish their first colony in Brazil.^[6] In the first century of settlement, the Portuguese realized it would be difficult to use the natives as slave labor. They were not docile, had high mortality when exposed to Western diseases and could run away and hide rather easily. So Portugal turned to imported African slaves for manual labor.^[7]

In the 16th and 17th centuries official revenue from Brazil was small — about 3 per cent of Portuguese public revenue in 1588 and 5 per cent in 1619.^[8] The economic activity was concentrated on a small population of settlers engaged in a highly profitable export–oriented sugarcane industry in the Northeast.

In the 1690s, the discovery of gold, and in the 1720s diamonds further south in Minas Gerais, opened new opportunities. The gold industry was at its peak around 1750, with production around 15 tons a year, but as the best deposits were exhausted, output and exports declined. In the first half of the 18th century profit remittances from gold averaged 5.23 million mil reis (£1.4 million) a year, of which the identifiable royal revenues were around 18 per cent.^[9] Total Brazilian gold shipments over the whole of the 18th century were between 800 and 850 tons.^[10]

Inconfidência Mineira

The Inconfidência Mineira of 1788–1789, led by the patriot and revolutionary Joaquim José da Silva Xavier (popularly known as Tiradentes), was the first major movement against Portuguese rule in Brazil.^[11] It was triggered by taxes, including the detested quinto do ouro or "royal fifth," a 20% tax on the gold produced.^[12] as well as the derrama  [pt], an annual tax quota of 100 gold bars imposed on the state of Minas Gerais; if it was unmet, the Portuguese crown could force the Brazilian people to pay the remaining balance.^[12] Inspired by the American Revolution, a group including military men, clergymen, poets, and intellectuals from Minas Gerais conspired to rise up in rebellion on the day the derrama was imposed, but three individuals informed the colonial government and the participants were arrested.^[13] The uprising failed and the conspirators were arrested.^[13] Tiradentes was drawn and quartered and his remains were sent to Vila Rica (Ouro Preto) to be displayed.^[13]

United Kingdom of Portugal, Brazil and the Algarves

In 1808, the Portuguese ruler, Prince Regent John VI, fled to Rio de Janeiro to escape the French invasion of Portugal.^[7] He brought about 10,000 of the mainland establishment with him — the aristocracy, bureaucracy, and some of the military.^[7] For 13 years, Rio de Janeiro functioned as the capital of the Kingdom of Portugal in what some historians call a "metropolitan reversal"—i.e., a former colony exercising governance over the entirety of the Portuguese empire.

In 1815, during the Congress of Vienna, John VI created the United Kingdom of Portugal, Brazil and the Algarves, elevating Brazil to the same rank as Portugal and increasing the administrative independence of Brazil. Brazilian representatives were elected to the Portuguese Constitutional Courts. In 1816, with the death of Queen Maria, John VI was crowned King of Portugal and Brazil in Rio de Janeiro.

John VI faced a political crisis when groups^[who?] in Portugal tried to reverse the metropolitanisation of their former colony. With the end of the Napoleonic Wars came calls for John to return to Lisbon and for Brazil to return to its previous colonial condition. By late 1821 the situation was becoming unbearable and John VI and the royal family returned to Portugal.

Independence of Brazil

The Portuguese Courts then demanded that Prince Pedro return to Portugal. As his father had advised him to do, the prince instead declared his intention to stay in Brazil in a speech known as the "Fico" ("I am staying"). Pedro proclaimed Brazilian independence on September 7, 1822 and subsequently became the first emperor of the country. There was some armed resistance from Portuguese garrisons in Brazil, but the struggle was brief.^[6] Portugal recognised Brazil's independence in 1825.^[14]

Revolta da Armada incident

In 1894 relations were strained between the two states after Portugal granted refuge to Brazilian rebels after the Revolta da Armada incident. Portugal had sent a naval force constituted by the warships Mindello and Affonso de Albuquerque to Rio de Janeiro to protect Portuguese interests during the naval rebellion against President Floriano Peixoto. On 2 April 1894, the uprising was crushed and 493 rebels, including 70 officers and the mutiny leader, Admiral Luís Filipe de Saldanha da Gama, sought refuge on board the Portuguese warships. Despite protests from the Brazilian government, Portugal granted refuge to the rebels and sailed to the Rio de la Plata, where most of the refugees disembarked. The incident was regarded as a violation of Brazilian sovereignty and led Brazil to sever diplomatic relations with Portugal.^[15][16] Diplomatic relations were re-established in 1895 by the Prudente de Morais administration.^[15]

20th century

In the 20th century, relations between the two countries were shaped by Brazil's much greater size and more powerful economy. For this reason, Brazilian investment in Portugal in the 1970s and 1980s was considerably greater than Portuguese investment in Brazil.^[17]