From President Lula’s point of view the least-best candidate won the US presidential elections on 5 November. His left-wing Partido dos Trabalhadores (PT) has traditionally felt closer to the US Democrats than to the Republicans in terms of upholding democratic values, affirming worker rights, and providing environmental protections. It was therefore disappointed by Donald Trump’s victory.
Emotions were, if anything, more intense because of the remarkable way in which US and Brazilian politics have mirrored each other in recent years. Trump first took first office in 2017, offering a blend of ‘outsider’ right wing and populist ideas, refusing to accept his subsequent electoral defeat in 2020 and coming close to endorsing the violent January 2021 attack on the US Congress. In Brazil, Jair Bolsonaro took office in 2019 supporting similar far right policies, and also refusing to accept electoral defeat in 2022. Then, in January 2023, he came close to endorsing a violent attack on government institutions including the Planalto presidential palace. Both the extended Trump and Bolsonaro families share friendship and close political affiliations. In short, although Bolsonaro faces a ban on standing for public office until 2030, Trump’s re-election will have a galvanising effect on the Brazilian far right and re-focus it on the 2026 presidential elections. It may even encourage it to overcome some of its current leadership divisions.
The second Trump presidency also poses major economic and environmental issues. Trump has spoken of applying tariffs of 25% or more on imports from China and Mexico, but Brazil — for whom the US is the second largest trading partner after China — could also be affected by an international swing to protectionism, and particularly if there is associated global trade disruption. A stronger dollar, together with higher US inflation and interest rates, could increase inflation and reduce capital inflows into Brazil causing lower growth and a weaker real currency. Analyst Luciano Sobral of Neo Investimentos says ‘Broadly speaking every 10% increase in the value of the dollar adds roughly 1% to [Brazilian] inflation for the year ahead: There is also concern that a slow-down in China, Brazil’s top export destination, could cloud the economic outlook for Brazil. In addition, a likely second US withdrawal from the Paris climate agreements will slow down and weaken the global energy transition, to the detriment of Brazil.’
Unsurprisingly Lula had previously expressed support for the Democratic Party’s Kamala Harris. When Trump’s victory was confirmed, he said he hoped he would be to have ‘civilized’ relations with him, just as he had with one of his Republican predecessors, George W Bush (2001-2009). Lula added that ‘democracy is the choice of the people and should be respected.’ His somewhat formal comments were in contrast to Bolsonaro’s, who welcomed Trump’s victory as ‘the flame of liberty, sovereignty, and true democracy’ which would ‘inspire Brazil to follow the same path.’
This excerpt is taken from Brazil Focus, our monthly intelligence report on Brazil. Click here to receive a free sample copy.The November 2024 issue of Brazil Focus also includes the following:
Politics
- Second round confirms centre-right’s electoral strength
- Government approval rates coming down
- Implications
- Government threatening to get tough with independent regulators
Foreign Relations
- Domestic accident keeps Lula home
- Lula seeks Trump realpolitik
- Enlarged BRICS may dilute Brazilian influence
- Depending less on the greenback?
Taking the Pulse
- Deep social changes at work in Brazil
Security
- Suicide bomber attacks Supreme Court
- New proposals to fight crime
- Arrest highlights role of jogo do bicho
- Marielle Franco case not over yet
Economy & Business
- Fiscal package in a holding pattern
- Central Bank tightens Selic interest rate
- Brazil is a top destination for FDI this year
- Crypto trading is surging
- Toyota upgrades Brazil strategy
- Airbus sees Brazil leading future demand for aircraft
Environment
- Brazil sets additional carbon-reduction target
- Increase in carbon emissions
- Vale/BHP sign mining disaster compensation deal
Energy Sector
- Eletrobras and Ocean Winds offshore wind energy partnership
- TotalEnergies exits distribution business
- Climate change forces rethink on power contract
