https://www.gisreportsonline.com/r/brazil-vote-u-s-china-balance

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Alejandro Peña Esclusa

The elections in Brazil will determine whether Washington’s new strategy for the Western hemisphere will hold.

The United States’ new national security strategy in Latin America is making steady progress, thanks to the center-right’s six electoral victories in the region. However, the toughest and most decisive battle will be fought in Brazil’s October 2026 presidential election.

For the “Shield of the Americas” to take root, it is vitally important that the next Brazilian government join the initiative, because Brazil is the most influential country in Latin America: It is the world’s 10th-largest economy, it is the size of a continent and it has the region’s largest population.

The first round of the presidential election will take place on October 4, with 13 candidates running. According to the polls, incumbent President Luiz Inacio “Lula” da Silva and Senator Flavio Bolsonaro, son of former President Jair Bolsonaro, will very likely face each other in a runoff on October 25, with the latest surveys showing them neck and neck.

If reelected, President Lula will strengthen relations with China and continue to promote the so-called Global Majority, the BRICS grouping and an alternative currency to the dollar. If Senator Bolsonaro wins, Brazil will join the Shield of the Americas to combat drug cartels and reduce its ties with China.

This election is also marked by a human factor: a personal confrontation between President Lula, whose political career could end in a resounding failure, and the Bolsonaro family, which says it has been persecuted by Lula’s allies, primarily Supreme Court Justice Alexandre de Moraes. Former President Bolsonaro was sentenced to 27 years in prison for plotting a coup and is now serving that sentence under house arrest, while another of his sons, Eduardo, has gone into exile in the U.S., citing persecution.

What Lula says and what he does

At the G7 summit held in France in June 2026, President Lula stated, “I was never a leftist.” He has built his political career by presenting himself as a centrist labor leader rather than a radical – a neutral mediator who seeks both autonomy of Brazil and a balance between emerging nations and the major powers. This image has allowed him to position himself as a go-between for Europe and the BRICS nations, to mediate conflicts in Latin America and to enjoy prestige as a moderate leader.

However, his career reveals a deep political and intellectual commitment to the Latin American left: above all, an anti-American stance, as well as adherence to Cuban Castro-communism, Venezuelan Bolivarianism and Bolivian indigenism. Beyond the region, Lula has condemned Israel and opposed the U.S.-Israel war against Iran, while seeking a privileged relationship with China.

In 1980, Lula co-founded the Workers’ Party (PT), a left-wing political force that brought together labor unions, social movements, Marxist intellectuals and Catholic groups linked to liberation theology. In 1990, he founded the Sao Paulo Forum (SPF) with Fidel Castro, an organization created to unite all Latin American leftist movements and help them survive the fall of the Berlin Wall. As leader of the SPF, Lula publicly supported the Cuban communist regime, repeatedly backed the Marxist leaders Hugo Chavez and Evo Morales and defended former leftist presidents Cristina Kirchner and Rafael Correa when they were prosecuted for corruption. Furthermore, Lula took an ambiguous stance when Daniel Ortega and Nicolas Maduro committed electoral fraud in Nicaragua and Venezuela, respectively.

As the leading figure of the regional left, Lula has championed BRICS and proposed creating an alternative currency to the dollar, which has led to clashes with the U.S. Regarding the war in Ukraine, President Lula condemned the Russian invasion but refused to join Western sanctions against Moscow. In February 2024, he compared Israel’s actions in Gaza to the Holocaust and later dismissed U.S. President Donald Trump’s plan for Gaza. In April 2026, President Lula played a leading role at the Global Progressive Mobilization in Barcelona, a summit that assembled many world leaders highly critical of Mr. Trump.

And when Mr. Maduro, the Venezuelan communist dictator, was captured in January 2026, Lula lashed out at Washington, saying it had “crossed an unacceptable line” by using military force in Venezuela. He has never accepted Washington’s accusation that Mr. Maduro headed the Cartel of the Suns.

Pax Criminalis

A hallmark of the Latin American left is its justification of guerrilla movements and criminal mafias, with which, its leaders argue, one must negotiate rather than fight. This policy – which former Mexican President Andres Manuel Lopez Obrador called “hugs, not bullets” and former Colombian President Gustavo Petro dubbed “Total Peace” – allows the level of violence to decrease, but at the cost of granting recognition and stability to the mafias. Some analysts call it the “Pax Criminalis.”

Ecuador offers a case in point. During President Rafael Correa’s administration, from 2007 to 2017, the homicide rate fell by 64 percent, yet in the same period the criminal group Los Choneros evolved from a regional organization into a much more powerful national structure.

The Lula administration highlights the decline in the homicide rate during his term. Indeed, in 2024, Brazil recorded its lowest homicide rate in 11 years. At the same time, however, criminal organizations such as the Primeiro Comando da Capital (PCC) and the Comando Vermelho (CV) have grown stronger.

When the Trump administration designated both the PCC and the CV as Specially Designated Global Terrorists and Foreign Terrorist Organizations in May 2026, President Lula’s government rejected the decision, calling them “arbitrary measures” and an example of undue interference in Brazil’s sovereign internal affairs. Mexican President Claudia Sheinbaum took a similar position when the U.S. proposed conducting joint operations to combat drug trafficking in her country.

The Latin American left places national sovereignty above U.S. willingness to assist in the fight against drugs. However, each country’s individual fight against organized crime is ineffective because criminal organizations operate throughout the Americas. The Shield of the Americas strategy provides a framework for joint operations at the request of member governments, without infringing on national sovereignty.

If the next Brazilian government does not join the Shield of the Americas, drug cartels could relocate to Brazil, make it their main hub of operations and run their regional activities from there. The U.S. regards having an allied president in Brazil as vital to its national security strategy.

Relations with China

Since returning to power in 2023, President Lula has made China one of the pillars of his economic strategy. He has deepened trade, technological, financial and political ties with Beijing; he has established cooperation in sensitive areas such as electricity infrastructure, 5G technology, chips and semiconductors, rare earth mining, satellites and artificial intelligence; and he shares China’s interest in strengthening BRICS and reducing dependence on the dollar.

Between Lula’s first presidential visit to China in 2004 and 2024, bilateral trade increased more than 17-fold. In 2022, China accounted for about 27 percent of Brazilian exports; in the first seven months of 2026, that share rose to 31.6 percent. This means that nearly one in every three dollars Brazil earns from exports comes from the Chinese market.

In November 2024, during Chinese President Xi Jinping’s state visit to Brazil, the two governments elevated their bilateral relationship to what they called the “China-Brazil Community with a Shared Future for a More Just World and a More Sustainable Planet.” They also signed 37 agreements in fields including agriculture, investment, infrastructure, industry, energy and technology.

More recently, that relationship has expanded to include AI. In August 2026, Brazil announced a supercomputing infrastructure project worth approximately $250 million in cooperation with Huawei and iFlytek, although the government expects U.S. chipmaker Nvidia to win the tender for a second supercomputer.

The comparison with the U.S. is revealing. Between January and July 2026, China purchased $69 billion worth of goods from Brazil, while the U.S. purchased only $21 billion. Brazil now exports more than three times as much to China as it does to the U.S. Paradoxically, although President Lula has said that his anti-imperialism is aimed at ensuring Brazil’s autonomy, in practice he has made his country deeply dependent on China.

Scenarios

Both scenarios play out against the same economic backdrop. One of the most significant problems facing the Brazilian economy is the budget deficit, driven in part by high public spending under the Lula administration and by the cost of servicing debt at high interest rates. Gross debt reached approximately $2.1 trillion in June 2026, equivalent to 81.9 percent of gross domestic product (GDP), and inflation is expected to end the year at about 4.9 percent, above the central bank’s tolerance ceiling. Household finances are also under strain: More than 80 million Brazilians are listed as past-due debtors, some 80 percent of households carry debt of some kind, and total personal debt exceeds $900 billion, or 35 percent of GDP, according to Central Bank of Brazil data.

Most likely: The U.S. influences the elections to benefit Bolsonaro

It is not in the U.S. national interest for Brazil to oppose its national security strategy, both regarding China’s influence in Latin America and the fight against drug cartels and organized crime. Therefore, in addition to the measures it has already taken to pressure President Lula, the Trump administration decides to step up its efforts to influence the Brazilian election campaign – as it did previously in Argentina, Honduras and Colombia – whether through public statements or through economic (tariffs), judicial or diplomatic measures, to ensure a victory for the right.

As a result, business sectors seeking to protect their own interests align themselves with Senator Bolsonaro, opting for the American model over the Chinese alternative offered by President Lula. This does not guarantee Senator Bolsonaro’s victory, but it does increase his chances.

For his part, Senator Bolsonaro proposes reducing the size of government by eliminating 10 ministries, cutting public spending and imposing a cap on public debt. He favors private investment through lower taxes, reduced regulation and privatization. He is also preparing a program to renegotiate personal debts, using privatized public assets as part of the financing mechanism, in a direct appeal to the country’s tens of millions of indebted voters.

On trade, he has proposed “freeing ourselves from the constraints of Mercosur” and adopting a system like the one advocated by Argentine President Javier Milei, which would give member countries greater freedom to negotiate trade agreements individually.

If Senator Bolsonaro wins, Brazil would align much more closely with Europe and the U.S. China would remain a trading partner, but no longer a strategic one. This shift could halt future Chinese investment in telecommunications, AI, infrastructure, energy, defense and sensitive technology.

Less likely: Lula reaches an agreement with Trump

Following the example of Venezuela’s interim president, Delcy Rodriguez, President Lula decides to negotiate with Mr. Trump, yielding to some of his demands, to ensure that the White House refrains from influencing the Brazilian election.

However, given his commitments to his political support network and international allies, Lula cannot compromise on his relations with China or join the Shield of the Americas. As a result, the agreements with the White House eventually fall apart.

A reelected Lula would govern according to the program he has proposed for 2027-2030, which is explicitly aimed at continuity: maintaining the current fiscal framework (arcabouco fiscal), using the state as a tool to boost productivity and raising taxes on the highest earners. He would also continue to champion Mercosur as a platform from which Brazil negotiates with Europe, Asia and other blocs.

Once reelected, Lula would seek to strengthen Brazil’s economic and strategic relationship with China while continuing to trade with the U.S. and Europe – unless sustained pressure from Washington leads him to exclude China from investments in strategically sensitive areas.