Jan 16 2026| Nº. 189

Editorial

Mercosul and the European Union are poised to signed the long-delayed trade agreement this week, capping more than 25 years of negotiations. On January 9, the European Union cleared the final procedural hurdles authorizing the signing of the pact, setting the stage for a ceremony scheduled for January 17 in Asunción, Paraguay, under Mercosur’s rotating presidency. While President Luiz Inácio Lula da Silva has personally lobbied European leaders to accelerate the deal — framing it as essential for strengthening Mercosur and countering a global drift toward protectionism — his office confirmed on Thursday that Lula himself will not attend the signing, with Brazil instead represented at the ministerial level. Delegations from the EU, including European Council President Antonio Costa and European Commission President Ursula von der Leyen, are slated to travel to Paraguay to sign the pact with Mercosur members, a move Brasília has championed as a way to anchor stronger ties and counter protectionist trends.

Amid this economic success, which promises to favor Brazilian exports, Lula has also intensified Brazil’s diplomatic engagement on regional security, speaking by phone with Russian President Vladimir Putin on Wednesday about the crisis in Venezuela. The call, initiated by Lula, focused on the fallout from the recent arrest of Nicolás Maduro in Caracas and underscored shared commitments to the sovereignty of Venezuela and peaceful resolution of tensions. Both leaders agreed to coordinate efforts through international forums such as the United Nations and the BRICS grouping to promote de-escalation and stability in Latin America. Lula’s outreach reflects Brasília’s desire to assert diplomatic autonomy, balancing ties with global powers while defending sovereign regional interests.

On the domestic front, strains within Brazil’s opposition sharpened this week after former first lady Michelle Bolsonaro publicly clashed with far-right influencer Allan dos Santos, exposing deeper fault lines on the right ahead of the 2026 race. In a video posted on January 14, Michelle accused dos Santos of bad faith after he criticized her for sharing content linked to São Paulo Governor Tarcísio de Freitas, dismissing his attacks as “unjust and reckless” and describing him as someone who “spreads lies and discord.” She denied backing any presidential candidacy other than that of Senator Flávio Bolsonaro, the former president’s son, and framed the episode as part of a broader effort to undermine her role and autonomy within conservative politics. The former president, facing a lengthy prison sentence for his involvement in an attempted coup in 2023, was transferred on Thursday from Federal Police custody in Brasília to the Papuda prison complex by court order. The dispute on the right reflects growing unease over who speaks for the movement and how to manage internal dissent, even as allies move to project unity amid speculation over potential successors to Jair Bolsonaro.

Highlights

• The Master Case. Brazil has been following an intricate case over the past few weeks involving corruption, investment market fraud, and even connections between the financial market and organized crime, with the participation of investors, economists, politicians, and executives who had varying degrees of ties to a relatively new and small bank called Master. The institution, which promised unrealistic profits to its investors, ended up attracting private and public fund managers who invested resources in worthless securities. A huge web of corruption and fraud has only begun to be revealed, and its full extent is not yet known. This week, the Federal Police froze R$ 5.7 billion belonging to those involved in the case and carried out a new round of searches and arrests.

• Parliamentary Amendments. At least 26% of all federal investments made in Brazil in 2025 corresponded to "parliamentary amendments," which are those approved by deputies and senators who have the right to propose billions of dollars in federal spending in their places of origin or with organizations to which they are linked. This unusual instrument for managing public resources was empowered by the Brazilian Congress to the detriment of the Executive Branch that was previously accustomed to having the final say on government expenditures. 

• Bolsonaro in prison. The defense of former president Jair Bolsonaro has once again requested that he be allowed to serve his sentence of more than 27 years under house arrest. The requests, based on the former president's health problems, have been repeatedly made to Supreme Court Justice Alexandre de Moraes, who this Thursday, transferred Bolsonaro from the Federal Police headquarters to an annex of the Papuda prison.

• Art and politics. This week, Brazil celebrated the winning of two Golden Globes: Best Foreign Actor, awarded to Wagner Moura, and Best Foreign Language Film, awarded to the film Secret Agent, in which he stars. The film deals with the Brazilian military dictatorship (1964-1985). The same theme had already been addressed in the film I'm Still Here, for which Fernanda Torres won the Oscar for Best Actress in 2024 and for which director Walter Salles won Best Foreign Feature Film. The political content of both works brought to light powerful messages from the artistic community, highlighting the importance of defending art, memory, and democracy in the face of an extreme right wing that, when in power, attempted to destroy national cinema.

2026 Election Observatory

Lula Leads. A Genial/Quaest poll released on Wednesday, January14 shows Lula leading in all scenarios for the 2026 election, both in the first and second rounds, regardless of who the opponent is. Lula has 35%, while the second-placed candidate, Flávio Bolsonaro, the far-right pre-candidate nominated by his own father, Jair Bolsonaro, who is imprisoned and ineligible, appears with 23%. In third place is the current governor of São Paulo, Tarcísio de Freitas, former minister under Bolsonaro, with only 9%. In the second-round simulation, the difference between Lula and Flávio is seven points; between Lula and Tarcísio, it is five points.

Additional Poll. In another poll, published this week by the news portal Meio, Lula also appears leading, but with the main difference compared to Genial/Quaest being that, in the second round, there is a tie between him and Tarcísio. The research commissioned by Meio also tested a scenario, which Genial/Quaest did not test, in which Jair Bolsonaro's wife, Michelle, competes with Lula. He appears with 40.1%; she, with 29.7%.

Soybeans and elections. The Escolhas Institute published a study suggesting three measures for the next president to contribute to an ecological transition in Brazilian agriculture. The organization identifies that soybeans occupy more than 47% of the cultivated agricultural area in Brazil, making this sector a major player

News from ABO and social organizations and movements:

2026 Elections. Starting this week, the Brazil Office Alliance (ABO) weekly newsletter will feature a new section dedicated specifically to news about the 2026 national elections. In October, more than 150 million Brazilians will vote for President of the Republic, state governors, state deputies, and senators. Until then, the organization hopes to contribute with information, analyses, and opinions that help to show the point of view of Brazilian civil society about this historical moment in which the defense of democracy will be at stake once again.

Museum of the Coup. This month, Brazil commemorated the failed coup attempt of January 8, 2023, when far-right militants linked to former President Jair Bolsonaro invaded and destroyed the headquarters of the Three Powers in the capital, Brasília, with the intention of preventing President Lula from assuming his mandate and governing the country. To mark the date, the Pact for Democracy announced the existence of a virtual museum created to "record the memory of the reaction of civil society and institutions to the attempted coup d'état in defense of democracy in Brazil." Visit the link.

Feature Article

The November 2026 U.S. Elections, Brazil, and Latin America 

By James N. Green*

On November 4, 2026, tens of millions of U.S. citizens will go to the polls to elect the 435 members of the House of Representatives, one third of the members of the Senate, and many governors, mayors, state legislators, and local officials.

Although it is common to declare in every voting cycle that a given year’s election is the most important in recent times, this year that statement is not hyperbolic. The outcome will affect not only the United States, but also Brazil and other parts of the world. 

Currently, Republicans control the House of Representatives by a difference of two seats. Their margin in the Senate relies of the loyalty of four members to vote consistently with their party. Should Democrats flock to the polls in early November as is predicted, it is likely that their party will win control of the House, and there is a small chance that they might eke out a majority in the Senate.

Historically, fewer voters turn out in mid-term election than in those for the presidency. Often the president’s party loses congressional seats, and in recent decades the party in opposition to the president has won one or both houses of Congress. Public opinion polls indicate that Trump’s overall approval rate as president has dipped to 42%, while his disapproval rate hovers around 55%. Moreover, in the scattered elections held in 2025, Democrats flipped 21% of the legislative seats held by Republicans and gained multiple seats in New Jersey, Virginia, Iowa and Mississippi. In two gubernatorial races--New Jersey and Virginia-- the Democratic candidates won by a margin of 14.4% and 15% respectively, considered landslide victories.

If Democrats gain control the House in November, they will be able to set the fiscal agenda for the final two years of the Trump presidency, as the lower chamber is responsible for initiating government spending bills. Trump circumvented that constitutional provision when he issued his tariff policies, arguing they were justified due to a national emergency. Although this is a fallacious argument, Republican House members have conceded their authority over fiscal issues to the president. With Democrats in charge, Trump and the Republicans would have to negotiate with their opponents to ensure the functioning of the government.

Democrats will also be able to hold Congressional hearings to investigate both the ways Trump and members of his Cabinet have usurped legislative power and the nature of his family’s business interests in the United States and abroad. Should Democrats also control the Senate, they will also be able to block any new appointments to the Supreme Court if there occurs a vacancy.

Trump has admitted that his fears a third impeachment process should Democrats take over the House. Although some politicians have contemplated the possibility, others argue that because Senate Democrats would not have a two-third majority to convict Trump, it makes more sense to focus on introducing and potentially passing legislation that will benefit ordinary voters. They insist that Democrats need to have clear program that addresses people’s immediate concerns about the rising cost of living and the unaffordability of housing, medical care, and basic everyday expenses.

In the 2024 presidential election, Trump’s victory was in large part due to voters’ frustration with post-Covid inflation and a perception that the economy was not benefiting ordinary citizens. Trump also insisted that the country’s most pressing problem was the fact that there were an estimated 15 million undocumented workers living in the United States that were supposedly taking U.S. citizens’ jobs and were responsible for the high crime rate. 

Most economists concur that Trump’s tariff policies have resulted in a spike in consumer prices and have failed to address deindustrialization and weaknesses in the economy. Moreover, while most people favor deporting undocumented people who have been convicted of serious crimes, such as murder and rape, 50% of adults polled disapprove of Trump’s current approach to immigration, while only 39% approve. The heavy-handed measures of Immigration and Custom Enforcement (ICE) officials, including the recent killing of Renee Nicole Good in Minneapolis, Minnesota, has generated demonstrations nationwide against the Trump administration.

To avoid a resounding electoral defeat, Trump has carried out a series of measures to tip the elections in his favor, ranging from convincing Republican majorities in the Texan and a few other states legislatures to redraw district maps to favor their party and increase the number of seats in Congress.  Although the federal government has little authority over how elections are conducted throughout the country, Trump is trying to convince states to end mail-in voting. He continues to attack voter machines in Democratic-leaning states and has staffed his administration with election skeptics and deniers. Moreover, some observers consider that Trump’s moves to deploy the National Guard to states that tend to vote Democratic is establishing a precedent that will allow him to demand their presence to seize voting machines and oversee the elections in states less likely to support Republican candidates.

Brazil and other Latin American countries should be alarmed about Trump’s recent incursions into the region. Although the U.S. president eventually backed down from his demand that the Brazilian government grant amnesty to Jair Bolsonaro and withdrew the Magnitsky sanctions against Supreme Court Justice Alexandre de Morais, there is no guarantee that he will refrain from meddling in the upcoming Brazilian presidential elections. Depending on who will be the leading candidate of the extreme right, Trump might decide to order clandestine activities to shake up the elections while publicly throwing his weight behind Lula’s chief opponent. Although this would undoubtedly stir popular nationalistic sentiment against his efforts, it could play a role in encouraging voters for the far right to go to the polls.  

Trump’s interference in the recent Argentine legislative elections by offering the country $20 billion to shore up its economy as long as the electorate favored his ally President Millei, his intervention in Venezuela this month, and his pledge to reassert U.S. hegemony over Latin America are clear warning signs of Trump’s intentions to play a significant role in casting the continent in his own image.

Whether he is successful depends in part on the determination of U.S. voters to restrain Trump by giving the Democrats the control of the House if not the entire Congress this coming November.

James N. Green is Professor Emeritus of Brazilian History and Culture at Brown University, the author or co-editor of twelve books on Brazil, and the President of the Board of Directors of the Washington Brazil Office.

Feature articles express the opinions of the author and do not necessarily reflect the opinions of the editors or WBO.