Lula gains lead in polls amid Trump's threats to Brazil.

Brazilian President Luiz Inácio Lula da Silva leads polls ahead of 2026 elections, with a 47.8% vote share compared to 44.2% for his main opponent, Tarcísio de Freitas. Lula's popularity has increased due to his response to US tariffs imposed by Donald Trump. The Brazilian market has responded positively to the news, with the Ibovespa rising 1% and Embraer's stock price increasing. The effective tariff rate after exemptions is estimated to be around 30%, lower than the expected 40%.

Brazilian President Luiz Inácio Lula da Silva is leading polls ahead of the 2026 elections, with a 47.8% vote share compared to 44.2% for his main opponent, Tarcísio de Freitas. Lula's popularity surge can be attributed to his response to U.S. tariffs imposed by former President Donald Trump. The Brazilian market has responded positively to the news, with the Ibovespa rising 1% and Embraer's stock price increasing. The effective tariff rate after exemptions is estimated to be around 30%, lower than the expected 40%.

The rise in Lula's approval rating reflects a momentary convergence between domestic issues and international events. Trump's announcement of tariffs, explicitly linked to former President Jair Bolsonaro's ongoing trial, was perceived by many Brazilians as an external threat to national interests [1]. Lula's firm response allowed him to assume a statesmanlike posture, mobilizing support beyond his base and reaffirming his international credentials [2]. This dynamic suggests that Lula and his allies could benefit from framing external tensions within a broader narrative of national sovereignty and dignity, especially if Trump's rhetoric intensifies.

The tariffs represent a serious, though not catastrophic, threat to the Brazilian economy. The sectors affected, especially steel and aluminum, are regionally concentrated and politically sensitive. Retaliatory measures or the diversification of trade partners can mitigate the effects, but the diplomatic cost is high. The Brazilian government has vowed to retaliate using its Reciprocity Law, with the priority being to negotiate and eventually appeal to the WTO [3]. The immediate disruption to supply chains and market uncertainty is a cause for concern.

Diplomatic relations between Trump and Lula are fraught. Trump's direct intervention in Brazil's internal judicial affairs has been met with strong condemnation from Lula, the legislative branch, and the population at large [4]. Lula has rejected what he has called 'unacceptable blackmail' and has defended Brazil's independent judiciary. While Lula has expressed willingness to engage in dialogue, the current climate is one of tension and firm resolve from Brazil to defend its sovereignty.

The tariffs and their explicit relationship to Bolsonaro's trial appear to have rallied public support behind Lula. This could reinvigorate his re-election bid, positioning him as a unifying figure amid perceived foreign aggression. It is a unique case of tariffs applied to a political issue, and they pose a tangible threat to the Brazilian economy. With the United States as a major trading partner, particularly in agriculture, steel, and some manufacturing sectors, a 50% tariff could severely affect export revenues and potentially stifle economic growth [5].

The Brazilian government must rely on its well-prepared diplomatic corps and experienced trade negotiators, avoiding politically motivated threats that lack sound economic justification. Brazil's government will try to negotiate the tariffs, but the issue involving the judiciary has already proven to be non-negotiable. Lula's firm response potentially boosts his standing ahead of next year's general elections. Even critics of his administration support his refusal to bow to external pressure and back his clear prioritization of Brazil's interests [6].

The rise in Lula's approval rating and the market's positive response to his handling of the tariffs indicate that Brazil is committed to defending its sovereignty and economic interests. The Brazilian government's approach to the tariffs, focusing on negotiation and retaliation, reflects a strategic effort to minimize the economic impact while maintaining national pride [7].

References:
[1] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[2] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[3] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[4] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[5] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[6] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil
[7] https://thedialogue.org/analysis/what-factors-are-driving-up-lulas-popularity-in-brazil