Brazil: A major political change

[Editor’s note: An leader of the Socialism and Liberty Party (PSOL) will be speaking at Ecosocialism 2025, September 5-7, Naarm/Melbourne, Australia. For more information on the conference visit ecosocialism.org.au.]

First published at Revista Movimento. 

Brazil’s political landscape has undergone a significant shift in the past two weeks, marking a qualitative change in national political dynamics. What began as a crisis triggered by the majority of Congress taking a right-wing opposition stance, demanding that President Lula da Silva respond more forcefully with popular policy, escalated sharply after the incident with US President Donald Trump and retaliatory tariff war directly attacked Brazilian sovereignty.

Our caucus within the Socialism and Freedom Party (PSOL), the Socialist Left Movement (MES), has quickly responded to the changing situation. We took to the streets on July 10 and participated in joint actions at every rally and demonstration aligned with this agenda, against Congress and the enemies of the Brazilian people: the far right, Trump, and the domestic coup-plotters. At the 60th UNE (Brazilian National Student Union) Congress in Goiânia, the youth group Juntos continued this fight, promoting solidarity with Palestine, ecosocialism, and an end to university budget cuts driven by the fiscal framework.

In light of these new developments, beyond our firm commitment, we want to discuss the new coordinates and tasks arising from this major political change in Brazil, which is, however, a reflection of the international situation, where resistance to Trump and his dictates is growing.

Trump vs. the Brazilian people

On July 9, Trump sent a letter to Lula announcing a 50% tariff increase on Brazilian products. He framed this as retaliation for what he called persecution of former president Jair Bolsonaro and even issued threats against Brazil’s Supreme Court. This came just days after the BRICS summit held in Rio de Janeiro and was justified with the false claim that the US has a trade deficit with Brazil.

This assault on national sovereignty, which beyond targeting Brazilian institutions, threatened to collapse key sectors of industry, had immediate repercussions.

First, it sparked a wave of anti-imperialist sentiment not seen since the early-2000s protests against the FTAA (Free Trade Area of the Americas). In recent years, the far right had opportunistically claimed the mantle of patriotism, but this episode makes it harder for them to sustain that narrative.

It had been years since we saw US flags burned in protests, as in the July 10 demonstration.

Second, the tariffs hit a large swath of Brazil’s national bourgeoisie, from citrus growers and agribusiness to the coffee, steel, and aerospace sectors. The indignation was reflected in the editorials of the bourgeois press, especially those aligned with the São Paulo business elite, such as Folha and Estadão.

Finally, Bolsonaro and his allies became visibly politically isolated. Whether in the stance taken toward the government, where, albeit belatedly, Davi Alcolumbre and Hugo Motta (Senate and Deputies Chamber Presidents, respectively) closed ranks with Lula, or in the direct attacks on Bolsonaro — as Estadão did.

Tarcísio (Governor of São Paulo State) also suffered political damage. After clumsily defending Bolsonaro, he lost ground. One Estadão editorial made clear that a segment of the business class expects the São Paulo governor to prioritize his state’s economic interests. As a result, some centrist factions that were drifting away from Lula in favor of Tarcísio have now pulled back and are in wait-and-see mode.

As if that weren’t enough, Trump has continued his attacks, mocking street vendors on 25 de Março and even Brazil’s PIX payment system, giving Lula’s government ammunition. What was once a liability for Lula, the PIX crisis (negative repercussions generated by the government’s decision to monitor financial transactions with the aim of identifying tax evasion and other irregularities, with allegations that the government was planning to tax Pix), is now a problem for Trump and the Bolsonaro camp.

Government regains its footing

Trump acted like a “mad firefighter”, one who pours gasoline instead of water to put out fires. The federal government seized the moment, expanding on earlier gestures such as advocating for taxing the ultra-rich.

With a broader field of action, Lula capitalized on his opponents’ weakness on three fronts: he continued to rally political struggle against Trump through social media and allied social movements, tapping into the energy of the new conjuncture; politically, he took the right step in considering a diplomatic application of the reciprocity law; and on the business front, he is working to rebuild ties with sectors of the business elite that oppose Trump’s tariff hikes. Lula’s emerging new pact may moderate the polarization around taxing the rich and allow him to lower the intensity of grassroots mobilizations.

The outcome has been striking. Lula has regained his footing and is rising in popularity while his main rivals are losing ground. According to a Quaest poll, Lula now leads in all projected scenarios. The same poll found that 72% of Brazilians blame Trump for the tariffs on Brazilian goods.

It’s the so-called “popular agenda” that’s driving Lula’s rebound, as he gains in the polls and sees his opponents struggling, with Jair Bolsonaro ejected from the race, Eduardo Bolsonaro isolated and at risk of arrest, leaving Tarcísio erratic and on the defensive.

Lula also struck a deal with Arthur Lira (former Deputies Chamber President) to advance a bill exempting lower-income earners from income tax. Though the plan’s progressive structure is still insufficient, it’s a notable departure from Finance Minister Haddad’s previous stance. On the IOF (tax on financial transactions) issue, Supreme Court Justice Alexandre de Moraes mediated a compromise, prompting a retaliatory “bombshell” bill from Congress. Vice President Alckmin is now negotiating a way forward before the tariffs go into effect on August 1, but the outcome remains uncertain.

An agenda gaining strength

This political moment calls for action. There’s now a real opportunity to launch a mass campaign to tax billionaires and revive anti-imperialist sentiment at a time when wide segments of the population, across all social classes, are becoming politicized.

Defending national sovereignty means defending the country’s interests, defeating the tariff war, and helping build an international movement against Trump. This fight must involve mobilizations that are democratic and inclusive, such as the August 11 Student Day rallies, where major organizations are preparing protests. The Metalworkers’ Union of São José dos Campos has already held a major demonstration in front of Embraer. Congresswoman Fernanda Melchionna has introduced a bill — dubbed the “Sovereignty Bill” — to toughen economic reciprocity laws.

We must strike back against imperialism by taxing U.S. corporations, pushing for patent waivers, regulating profit remittances abroad, and taking other steps toward centralizing foreign trade.

To fuel the mass movement, workers must have confidence in their own power. Key demands like ending the 6-day workweek (6×1) need to be unified in a national day of strikes and mobilization. We must also participate in the people’s referendum scheduled for September.

Veto it, Lula!

Still, in the midst of all this, agribusiness quietly pushed through the “Devastation Bill” late at night. In a country set to host COP30, we’re now witnessing the worst environmental setback in decades.

This only underscores the regressive nature of agribusiness, which depends on a primary-export model that breeds subservience, exploitation, and environmental degradation. That’s why the anti-capitalist and independent left, represented within PSOL, must continue to assert its own agenda and values.

Lula was right to listen to public opinion and veto the bill that would have increased the number of federal deputies. Now he must do the same again: Veto the Devastation Bill, Lula!

A new political phase is underway. It’s a showdown between imperialism, its local agents, coup-plotting sellouts, and the Brazilian people as a whole. Only through grassroots mobilization can we build the strength to defeat Brazil’s enemies.

Israel Dutra is a sociologist, Secretary of Social Movements for PSOL, a member of the party’s National Leadership, and an activist with the Socialist Left Movement (MES/PSOL).