How Trump (Almost) Made Lula Great Again

On August 1st, President Donald Trump imposed 50 percent tariffs on a host of Brazilian products—currently the highest for any country in the world other than India. The White House’s nonsensical pretext is that Brazil posed unfair trade barriers to US exports and violated the human rights of former president and Trump ally Jair Bolsonaro (2019-2023)—who is currently on trial by Brazil’s top constitutional court (STF) and is barred from running for office. Considering that Brazil is one of the few nations with which the US maintains a trade surplus, it’s fair to say that the current tariffs aren’t trade related.

But the tariff broadside has been a boon for Brazilian President Luiz Inácio Lula Da Silva of the left-wing Worker’s Party (PT). On July 17th, Lula delivered a televised speech slamming Brazil’s right-wing opposition, many of whom—such as Bolsonaro’s son, Eduardo—travelled to Washington to lobby for sanctions on Brazil over the former president’s trial. “The fact that this attack has the backing of some Brazilian politicians… They couldn’t care less about the economy and the damage caused to our people; they are the real traitors to the nation,” he said. It’s a welcome return to form for a leader who’s spent most of his term capitulating to the worst elements of the Brazilian establishment as well as his own coalition, recording a 39 percent approval rating in June, the worst of any of his terms, which has since recovered to around 50 percent.

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Having previously governed between 2003 and 2011, Lula was heralded by Barack Obama as “the most popular politician on Earth” with around 80 percent support prior to leaving the presidency. Born into poverty in Brazil’s rural Northeast, the former union leader made for compelling television when he delivered a tearful inauguration speech on New Year’s Day, 2003. After failing to win the presidency in 1989, 1994, and 1998, the leftist firebrand embraced the third-way politics of his British and North American peers, making peace with Brazil’s rentier elites.

Limited efforts were made to undo the disastrous deindustrialization and mass privatizations of his predecessors,though the commodities boom of the 2000s aided redistributive efforts via popular social programs such as the Bolsa Familia stipend. After stagnating for more than a decade, the PT hiked the monthly minimum wage adjusted for inflation from USD$100 to USD$506 between 2003 and 2012; at least 20 million people left poverty during Lula’s presidency. The administration was also praised for reducing deforestation from historic highs by 80 percent while still managing to quintuple rents from agribusiness.

Sadly, Lula’s hand-picked successor, Dilma Rousseff (2011-2016), presided over a generational socioeconomic and institutional collapse brought on by the Lava Jato (Car Wash) corruption investigations, mismanagement, and commodities bust of 2014. Brazil’s national debt rose from 58 to 93 percent of GDP between 2014 and 2019 as the country dipped into recession followed by a period of abysmal growth. Inflation similarly rose to 10 percent in 2016.

Her conservative successors, Michel Temer (2016-2019) and later Bolsonaro, enacted an austerity program that further limited growth and reversed the wage gains seen under Lula. Social spending was constitutionally capped, and a privatization campaign targeting everything from airports to pensions squeezed social services. A 2017 labor reform allowing for limitless subcontracting led to a proliferation of conditions akin to slavery among outsourced workers. The wage share of the working class inevitably fell to historic lows as policymakers refused to hike the minimum wage for fear of stoking inflation.

The great irony is that during this period, the PT and the Brazilian Left more broadly were subjected to a concerted campaign of lawfare and political persecution comparable in many ways to the current judicial crusade against Bolsonarismo. While the Car Wash investigations imprisoned politicians from across the political spectrum over graft received from construction companies, a questionable zeal was directed towards the left-of-center. Outside of the presidency, a majority of politicians in Brazil are members of clientelistic ‘centrist’ political parties that dominate congress and are known collectively as the Centrão.

Rousseff was impeached and removed from office by the Centrão in 2016 on the spurious charge that she misrepresented the country’s finances—a crime committed by every president since the end of military rule in 1985. Lula, similarly, was sentenced to twelve years in prison for allegedly receiving an apartment as a bribe—a charge that prosecutors privately admitted was dubious considering that the accused never inhabited the property.

The broader discrediting of Brazil’s political class paved the way for the comparatively uncorrupt Bolsonaro to rise to prominence ahead of the 2018 election. At the time, the same justices now committed to jailing the far-right president ratified Lula’s contrived conviction, effectively handing the former the presidency. The great irony is that Rousseff enabled both her and Lula’s political demise by passing laws preventing politicians convicted of corruption from running for office as well as ratifying plea bargaining—the precise mechanism through which all Car Wash convictions were obtained.

By the end of Bolsonaro’s term, the justices of Brazil’s high courts were justifiably paranoid that the dictatorship apologist they helped elect wasn’t as keen on checks and balances as they expected. Bolsonaro followed the precedent set by Donald Trump, claiming more than a year in advance that the 2022 election would be rigged against him by Brazil’s top electoral court, the TSE. That year, Alexandre de Moraes assumed the presidency of the TSE (serving concurrently as a justice of the STF).

The courts began to systematically censor “misinformation” from Bolsonaristas on social media, with Moraes jailing five people without trial for social media posts deemed threatening. On paper, Brazil’s constitution is decidedly liberal, enumerating more rights than any other constitution in the world. In practice, the inordinate latitude the document bestows on its judiciary allows judges to interpret certain rights as they wish, including by trampling over free speech.

The justices subsequently absolved Lula of his sentence and restored his political rights in the hope of defeating the incumbent president. Comically, their steadfast defense of ‘democracy’ nearly reelected Bolsonaro. In August of 2022, two months before the first round, a leaked WhatsApp chain showed prominent Brazilian businessmen defending the idea of a military coup in the event of Lula’s victory. In response, Moraes and the TSE raided the homes of eight of the businessmen, froze their bank accounts, and eventually jailed the ‘perpetrators’ in question. However, Bolsonaro, who railed against the court's abuses, ultimately benefited from the draconian reaction.

During the presidential run-off, Bolsonaro ordered the Federal Highway Police (PRF) to halt thousands of buses carrying voters in PT strongholds, mostly in Brazil’s northeast. In the end, however, Lula prevailed by an impossibly small margin of 50.9 to 49.1 percent. Bolsonaro’s most committed supporters took to the streets and camped in front of army barracks, calling for a military takeover. Many remained at their posts until the events of January 8th, 2023, a week after Lula was inaugurated.

That day, thousands of Bolsonaristas raided, looted, and van­dalized the seats of all three branches of power in the Brazilian capital, mirroring the events of January 6th, 2021, in Washington. The riots took place on a Sunday, when neither Congress nor the Supreme Court was in session. In their own words, the rioters sought to proclaim a state of disorder that would reinstate the former president via a military intervention—a contrived goal considering that Lula was outside the capital at the time and Bolsonaro had arrived in Orlando, Florida, two days before leaving office.

As comparable as Trump and Bolsonaro’s efforts to cling to power may seem, some similarities and differences are worth highlighting. In Brazil, members of the military refused to clear encampments of Bolsonaristas outside Brasília’s army headquarters, from which the January 8th attacks were staged. In contrast to the infamous, if isolated, incident involving the Capitol police on January 6th, scores of active police and military officers were also observed in Brasilia welcoming protestors onto premises and assisting them in escaping arrest on the day of the riots.

In the US, Trump’s petulant behavior of fomenting his supporters at the National Mall before disappearing for hours to watch the ensuing riot on TV has an apt analogy in Portuguese: jogou a pedra e escondeu a mão. Literally, he threw the stone and hid his hand. Bolsonaro, likewise, fed into his supporters’ conspiracies and engaged in suspicious, if thus far inconclusive, acts in the days before the riots. On January 2, Brasilia mayor Ibaneis Rocha reappointed Bolsonaro’s security minister, Anderson Torres, to his previous post as the city’s secretary for public security; unlike Washington, DC, Brasilia is a right-wing stronghold. The day before the riots, Torres also traveled to Orlando, though he claims he didn’t meet with Bolsonaro.

Yet, the most compelling crimes attributed to both leaders—such as Trump’s attempted tampering of Georgia ballots—were mostly unrelated to the respective riots in each nation’s capital. In Bolsonaro’s case, the former heads of Brazil’s armed forces testified in 2024 that the former president asked them to support a coup after the run-off, declaring martial law and subsequently arresting or assassinating Lula. Remarkably, two of the three chiefs refused to back the plan and threatened to arrest Bolsonaro should he insist on extending his term by force.

Texts from the former president’s personal secretary, Mauro Cid, as well as a memo found in the home of Anderson Torres, seem to substantiate the purported plot. In his own words, Bolsonaro has taken to the oxymoron that he explored ‘constitutional’ options for remaining in power past his term. Unlike his Brazilian counterpart, Trump, to his credit, has yet to entertain the possibility of staying in power by military means.

As serious as the far-right leader’s alleged crimes may be, it’s disingenuous to posit—as many progressives have—that Brazil’s autocratic judiciary hasn’t fueled the equally authoritarian tendencies of Bolsonarismo. In the same vein, conservatives in and outside of Brazil are dishonest in casting Bolsonaro as the unassuming victim of legal tyranny. Never mind the fact that Bolsonaristas were steadfast defenders of Brazilian justice at the time of Lula’s conviction in 2018.

It’s all the more disappointing, then, that Lula has embraced an even worse form of lawfare from the same justices that elected his right-wing rival in the first place. Censorship, particularly of Bolsonaristas, remains rife on social media, and even the most unassuming participants in the events of January 8th have been given sentences more severe than those of murderers. In 2023, Bolsonaro was even indicted for ‘harassing’ a whale while jet skiing, though the case was thankfully dismissed in 2025.

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Lula’s third term showed some initial promise but over time has fallen victim to many of the same traps of progressive peers such as Chile’s Gabriel Boric and Colombia’s Gustavo Petro. In his first year, the Brazilian president managed the rare feat of increasing his polarized approval after assuming office. By the end of the year, some polls recorded support as high as 60 percent, including from around a quarter of Bolsonaro voters.

Early on, the administration enacted a series of popular measures, such as cutting taxes on low-cost vehicles and aggressively cracking down on forced labor, rescuing over 5000 workers since 2023. Brasilia also clamped down on deforestation and illegal mining by restoring Brazil's alphabet soup of environmental agencies, such as IBAMA and INCRA, which had been gutted by Temer and Bolsonaro.

At the same time, Lula significantly expanded oil and mining concessions and announced a host of initiatives that enraged environmentalists, such as the Ferrogrão rail connecting the states of Mato Grosso and Pará, Tucuruí transmission lines in Roraima, paving of the BR-319 Amazonas highway, and—most importantly—oil exploration near the mouth of the Amazon River. Brazil’s central bank (BCB) also finally began cutting rates from a pandemic high of 13.75 percent in tandem with inflation. Then in January of 2024, the president unveiled a $60 billion industrial plancomposed of subsidies, local content requirements, and credit lines, which led to Stellantis, Toyota, Hyundai, and General Motors announcing $14 billion worth of investments in Brazil, with an additional $30 billion secured from Chinese firms in 2023.

All of this has been helped by a second commodities boom powered by the end of the Covid-19 pandemic and the war in Ukraine, as well as Trump’s global trade war. In 2024, Brazil’s trade surplus rose to a record $87 billion, with GDP expanding 3 percent in 2023 and 2024. Oil production similarly rose to 4.3 million barrels per day in 2023 before falling slightly last year.

By 2025, however, Lula has allowed—and in some cases encouraged—various special interests to undermine his administration’s purported goals. In any normal capitalist economy or social democracy, efforts to boost resource rents as well as promote development and industrialization would be lauded by observers. But in a financialized resource colony like Brazil, a coterie of local and international investors, NGOs, and environmental bureaucrats have cowed the administration for everything from criticizing the central bank to prioritizing production over dividend payments at the state oil firm, Petrobras—itself a betrayal of climate commitments.

Prior to the pandemic, the BCB maintained a high but sensible interest rate of 6.5 percent in response to an elevated but stable inflation rate of 4.5 percent. Fast forward to today, and inflation has flatlined at a slightly higher rate of 5 percent since 2023. But because Lula dared to critique the central bank—and initially refused to resume the pre-Covid austerity of his predecessors—the BCB resolved to extort the administration into cutting spending by hiking rates. The monetary shakedown worked, and Lula has cut billions from Brazil’s paltry social budget as interest rates have risen from a ‘low’ of 10.5 percent in 2024 to an unconscionable 15 percent in 2025.

Hardly engaged in reckless spending, more than 90 percent of Brazil’s budget deficit is composed of interest payments—the paradoxical implication being that the BCB could easily reduce total spending by cutting rates. The prevailing groupthink is so nonsensical that even the central bank has acknowledged that investors—mostly local Brazilian investors—have fueled inflation via panic-induced asset sales, which have weakened the Real. To add insult to injury, Lula’s multiple appointments to the BCB, including close ally Gabriel Galípolo as the lender’s president, have continued their libertarian predecessors' counterproductive policies against government spending.

The sad reality is that Lula faces a lose-lose scenario in his dealings with Faria Lima—Brazil's Wall Street named after the eponymous avenue in São Paulo. The Brazilian economy is so financialized, investors can more or less dictate fiscal and monetary policy to both the government and BCB by crashing the stock market. Consequently, austerity has since forced Lula to abandon a grander vision for development and embrace policies meant to appease Faria Lima, such as tax reform and online gambling. He has also seemingly abandoned his campaign promise to renationalize Eletrobras—the state electric firm that Bolsonaro took private. The current administration also facilitated the privatization of the vital but bankrupt military aviation firm Avibras.

Much of the same can be said in regard to the powerful green industrial complex comprised of environmental and climate-oriented regulators, NGOs, foreign aid, and finance—the latter three of which fund sizable parts of the Brazilian government. Of the aforementioned projects announced in 2023, only the Tucurí transmission has been completed. Conversely, the Ferrogrão, BR-319, and oil exploration near the Amazon River have yet to receive approval from environmental regulators, let alone enter construction or begin operations.

As president, Bolsonaro presided over a doubling in deforestation amid a boom of environmental crime. Illegal mining in Roraima’s Yanomami reservation led to mass poisoning of around 1000 indigenous children, as the administration also condoned the illegal sale of a plot of land larger than the city of São Paulo to an Iberian logging firm in the states of Acre and Amazonas. In fairness to the former president, deforestation during his presidency was still far below the rates seen prior to Lula’s first term. Yet unlike the military dictatorship—which built destructive if also vital developmental projects such as the Itaipú Dam—Bolsonaro’s view of development can more accurately be described as destruction for destruction’s sake.

The unfortunate reality is that many of the NGOs and environmental bureaucrats that hold sway over the Lula government, such as environment minister Marina Silva, adhere to a comparably pernicious view that virtually any development comes at too great a cost to environmental and climate commitments. During Lula’s first and second terms, Silva also served as environment minister until 2008, when she resigned over her opposition to purportedly unspeakable crimes against the environment, like the use of hydroelectric dams, biofuels, and genetically modified crops.

More than a decade later, Silva’s standing within the climate industrial complex has made her both a lynchpin of the administration’s green virtue signalling as well as a perpetual thorn in its side. Within the Lula government, opposition to exploration in the Amazon above all has been shepherded by the intractable Silva, who has weaponized regulators to stifle the administration’s initiatives via red tape. Peruse the pages of English-language media, and one can find a twisted alliance between progressive and financial publications such as The Guardian and Financial Times lionizing Silva and attacking Lula for compromising the Earth’s future.

As with monetary policy, the president has since taken the hint and ceased criticism of climate hawks he accused in 2023 of ignoring the needs of the more than 3 million Brazilians that live in the Amazon. Then in February, the administration succumbed to the twin pressures of austerity and climate fundamentalism by signing an agreement handing over administration of Brazil’s indigenous reservations to the multinational environmental management company, Ambipar. The agreement effectively privatizes 1.4 million square kilometers of land, representing 14 percent of the country’s territory.

Much like investors, the fanaticism of climate hawks has led to the deliberate erasure of facts that run counter to established narratives. Were it the case that the Brazilian government was deliberately destroying the Amazon, as was the case before—and to a lesser extent after—PT rule, a more credible case could be made against major initiatives like oil exploration in the region (though the case against paving existing roads remains inane). Yet deforestation has again fallen to record lows since Lula returned to office—a fact that should offer some leeway for development.

In July, Congress approved what Silva and activists dubbed the ‘devastation’ bill, reducing the scope of environmental regulators. Having passed via supermajorities, Lula issued a line-item veto of the bill's most objectionable provisions but notably left a fast track for oil exploration near the Amazon untouched.

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Lula’s posture of refusing to compromise on Brazil’s sovereignty while remaining open to dialogue over trade with Washington has paid electoral and geopolitical dividends as American rivals have rushed to accept exports that otherwise would have gone to the US. Trump, moreover, blinked, exempting a host of vital Brazilian goods unilaterally from tariffs, such as aircraft and fertilizers.

For all of investors' self-loathing, moreover, corporate profits have soared under Lula, with unemployment falling to record lows. Despite the scourge of both austerity and crippling interest rates, the government’s modest industrial policy has nonetheless paid dividends; Brazil is currently on course to export half a million cars in 2025. The fact that none of this features into investors’ calculus of the country’s economic health stands as a scathing indictment of their business acumen.

At the same time, the bite of both tariffs and interest rates appears to have finally taken a dent on Brazil’s economy. GDP growth is now expected to fall to 2 percent in 2025—an urgent reason to further expand oil production and improve domestic infrastructure. In the president's own words, moreover, voters have good reason to be furious about inflation, which has far outpaced wages.

Unlike in his previous terms in office, Lula has failed to meaningfully raise the minimum wage, which rose by an increment of just 7 percent in 2025—itself another capitulation to Faria Lima and its Centrão allies. More than two and a half years after the Workers’ Party returned to office, Brazil’s minimum wage is still barely half its 2012 peak in real terms and has remained effectively stagnant since 2020 at USD$251 a month. Shockingly, only Javier Milei’s Argentina and Nicolás Maduro’s Venezuela have a lower minimum wage in the Americas.

Further, while the administration deserves praise for its crackdown on forced labor, it’s telling that no efforts have been made to overturn the 2017 labor reform. Indeed, the country’s push towards reindustrialization will inevitably lead to further exploitation so long as underlying incentives remain unaddressed. Much like Mexico, there’s a risk much of the current reindustrialization in Brazil transforms the country into an assembly colony with little high-value indigenous industry—a key reason why Lula has leveled tariffs against Chinese EVs.

The Brazilian leader faces a crossroads in his third term. After consistently ranking as the favorite for next year’s presidential election, polls taken prior to Trump’s tariff threats showed Lula tying or losing to a variety of opponents, including the ineligible Bolsonaro. Now, the president is once again the favorite, though by narrower margins. Most Brazilians believe that Trump was wrong to impose tariffs (72 percent) and oppose US interference over the Bolsonaro trial (57 percent). Fifty-five percent also believe that the former president sought to remain in office via military coup.

It’s entirely possible that Lula could cruise to reelection in 2026 given divisions and the broader toxicity of the Brazilian right, though it's worth noting that the inevitability of a run-off will help coalesce both political coalitions. Bolsonarismo has universally praised Washington’s tariffs, with some going as far as to laud the possibility of Trump bombing Brazil with the aim of combatting the country’s drug gangs. Bolsonaro, moreover, seems likely to back one of his unhinged sons or wife in 2026 over a more palatable list of current governors, such as Tarcísio de Freitas, who has attempted to draw distance from the tariffs.

At the same time, 39, 35, and 15 percent, respectively, blame the Bolsonaro family, Lula, and Alexandre De Moraes for provoking the tariffs; when forced to choose the Bolsonaros and Lula, 55 percent blame the former and 46 percent the latter. From a purely electoral—as well as principled—perspective, the president would benefit from criticizing the worst excesses of the judiciary while still maintaining that Bolsonaristas accused of serious crimes should be brought to justice. In all likelihood, Lula fears losing the favor of the country’s high courts—a reasonable fear considering that justices like Moraes are akin to co-executives that cohabitate with the incumbent president.

If Lula were a gambling man à la Spain’s Pedro Sanchez, he could aim to strike a high-stakes gambit with both Congress and the Trump administration. A grand bargain removing tariffs by restoring Bolsonaro’s political rights could be used to the administration’s benefit, for instance, by doubling the minimum wage. While it’s certainly compelling that the severity of an attempted military coup warrants electoral disqualification, a case can also be made that defeating Bolsonaro a second time at the ballot box would bolster Lula’s political capital as well as that of Brazil's democracy.

Odious as he may be, the former president’s electoral staying power should give progressives pause as to the underlying source of his appeal. The truth is that the former president more closely appeals to the increasingly conservative values of Brazilians than the alternative left-of-center. In recent decades—and particularly amid the chaos of the 2010s—Brazil has undergone an Evangelical Great Awakening. Around a third of Brazilians identify as evangelical in 2025 compared to just 9 percent in 1990. Accordingly, conservative attitudes towards gay marriage, trans issues, abortion, and even gun ownership have increased in the previous decade.

Even as he was voted out of office, Bolsonaro’s party, the PL, secured a record 99 out of 513 seats in the Chamber of Deputies in 2022. In the subsequent 2024 local elections, center-right candidates dominated mayoral races as the left suffered serious losses. While Lula has towed a pragmatic line on a variety of social issues and even conducted outreach among evangelicals, many left-of-center remain hopelessly out of touch with voters and have imported repellent, boutique causes from abroad that often make little sense in the Brazilian context. Last year at a rally in São Paulo, Lula and PSOL mayoral candidate Guilherme Boulos scrambled to downplay the singing of Brazil’s national anthem in gender-neutral Portuguese.

Electorally speaking, Brazil is two separate countries with discrete voting patterns. In the country’s southern, central, and southeastern regions, working-class and rural Brazilians voted overwhelmingly for Bolsonaro in 2022, while urban professionals voted en masse for Lula. Conversely, in Brazil’s peripheral North and poorer Northeast, upper-class coastal professionals voted overwhelmingly for Bolsonaro in contrast to Lula’s rural and working-class voters. The incomprehensible result is that the president’s northern and northeastern voters are effectively hostage to the bourgeois whims of their southern peers.

The Brazilian Left would benefit from embracing a more socially heterodox brand of leftism akin to that of Mexico’s AMLO—a move that would bring the ruling coalition more in line with the views of its own voters, let alone Brazilians as a whole. In the same vein, AMLO’s example of excising the influence of international NGOs—as well as using the military to circumvent red tape—was instrumental to the construction of developmental projects such as the ‘ecocidal’ Maya Train. The success of his Morena party, as well as his successor, Claudia Sheinbaum, in raising wages similarly harkens to Lula’s prior terms as president. While the current legislative environment is more hostile towards the PT than in the 2000s, it’s incumbent on the administration to demonstrate to voters that it’s exerting a concerted pressure on Congress to hike wages. Ironically, the central bank’s case for stratospheric interest rates would be more compelling under a regime of substantial wage growth.

The lesson of Lula’s third term is that voters reward leaders that confront established interests on their behalf, including—and often especially—those favored by affluent progressives. If he is truly serious about winning reelection and—more importantly—abiding by his party’s namesake, the Brazilian leader will need to do more than simply oppose Bolsonarismo and its allies in Washington.

He can start by firing his insubordinate environment minister and redirecting what remains of his political capital towards raising wages and outsmarting investors.

Juan David Rojas is South Florida-based writer specializing in U.S. and Latin American politics. He is a frequent contributor to Compact, UnHerd, and American Affairs.