Brazil’s 2026 Election Threatens EU Trade Deal and Deepens US Ties

Key points

• Lula leads 39% to 34% in the latest Quaest poll, but a runoff on October 25 remains likely due to the narrow margin.
• The EU-Mercosur trade deal, provisionally effective since May, faces ratification delays until next summer due to a referral to the EU Court of Justice.
• Flávio Bolsonaro has pledged to align Brazil with the US, citing supply chain security and anti-cartel cooperation, potentially reversing his father’s environmental policies.
• Recent EU restrictions on Brazilian steel and antimicrobial requirements for animal products have strained relations, with Brazil considering a rebalancing clause in the trade deal.
• Jair Bolsonaro is serving a 27-year prison sentence for a coup attempt, a case that has fueled US-Brazil tensions and Trump’s imposition of 40% tariffs on Brazilian goods.

Background

This election follows years of diplomatic rebuilding between the EU and Brazil after Jair Bolsonaro’s departure. The EU-Mercosur agreement, negotiated over 25 years, was finalized during Lula’s current term but faces political hurdles in Europe. Previous tensions included disputes over Amazon deforestation and climate policy, which have resurfaced as concerns regarding a potential Bolsonaro return. The archive notes Trump’s recent protectionist stunts, such as renaming New Mexico, reflecting his broader interventionist stance in the Western Hemisphere, which may influence his support for Flávio Bolsonaro.

How outlets are covering it

Politico emphasizes the strategic risk to the EU-Mercosur deal, noting that a Bolsonaro presidency could make the agreement 'politically toxic' in Europe and align Brazil with US protectionism. The outlet highlights concerns from EU officials about environmental reversals and the impact on critical mineral supply chains. The Guardian, however, frames the election as a moral choice, warning that a Bolsonaro victory would undermine democracy, human rights, and climate stability. It criticizes Flávio Bolsonaro’s campaign for undermining trust in electronic voting and notes the potential for aggressive anti-crime measures that trample human rights. Both outlets agree on the close race but differ in emphasis: Politico focuses on trade and geopolitical alignment, while The Guardian stresses democratic and social consequences.

Why it matters

The election outcome will determine Brazil’s foreign policy direction, affecting global trade dynamics, environmental policy, and US-EU relations. A Bolsonaro win could disrupt the EU-Mercosur deal, intensify US-Brazil ties, and reverse environmental protections, impacting global climate goals. A Lula victory preserves current diplomatic efforts but faces ongoing trade disputes, requiring continued negotiation to maintain stability. The result also influences regional power balances, as Brazil is Mercosur’s largest economy and a key player in critical mineral supply chains.

What to watch

The first-round results will be announced on October 1, with a potential runoff on October 25. If Lula wins, the EU-Mercosur deal may proceed toward ratification next year, though agricultural disputes could persist. If Flávio Bolsonaro wins, expect a shift toward US alignment, potential reversals of environmental policies, and challenges to the trade deal’s ratification. The EU may also reassess its partnership with Mercosur, considering alternative alliances in response to US protectionism.