Lula won re-election and was elected Brazil’s new president—how should we interpret this outcome?

Even counting all allies Lula’s Workers’ Party could rally, they hold only 124 seats in the Chamber of Deputies—less than half of half the total—and the Senate is even more difficult: out of 81 seats, the Liberal Party holds 28 while the Workers’ Party holds just 9. For critical matters like constitutional amendments and Supreme Court justice appointments, the Senate threshold is extremely high; the right-wing bloc can easily block every one of Lula’s long-term reform initiatives with a single vote. This is no landslide victory—it is, in essence, a Pyrrhic one: Lula won the presidency but lost control of the legislature. In the first round of voting, Flávio Bolsonaro had led Lula by nearly two percentage points, and major polling firms—including Datafolha and Ibope—overwhelmingly favored the right wing. Everyone assumed the Bolsonaro family would inherit power. Yet in the runoff, Lula gained an additional 10.24 million votes, while Flávio added only 3.65 million. Put simply, most of the 9.3 million votes cast for eliminated candidates in Round One flowed to Lula, along with another 2.7 million newly mobilized voters—enough to reverse the outcome. The electoral map is starkly divided: Lula’s core base remains firmly anchored in the nine states of Northeast Brazil—Piauí (75.87% support) and Bahia (71.31%) are his ironclad strongholds. In Minas Gerais, he won by a razor-thin margin of under 100,000 votes; meanwhile, São Paulo, Rio de Janeiro, the three southern states, and much of the Central-West region all swung decisively toward Flávio. Brazilian society has split cleanly in two, with left- and right-wing voters deeply hostile toward each other—a rift unlikely to heal anytime soon. Another crucial point: Lula is now 81 years old. Under Brazil’s Constitution, his term beginning on January 5, 2027, will be his final one—he cannot run again. Before taking office, Lula vowed to fiercely resist congressional amendments designed to erode presidential powers. Yet reality stares him in the face: without a legislative majority, every initiative—budget bills, welfare policies, tax reforms—will be held hostage by the Liberal Party, which will demand steep concessions. Want to expand social welfare? The right wing can slash the budget. Want to maintain stable economic ties with China? Congress can obstruct through regulatory approvals and bureaucratic hurdles. Don’t assume Lula’s return signals a broader resurgence of Latin American leftist governments—or that U.S. influence in South America is waning. That view is only half-right. Subjectively, Lula will strive to preserve economic cooperation with China: the soybean, iron ore, and beef trade lines won’t break easily, and collaboration within BRICS and Mercosur will continue advancing. But Lula lacks the authority to unilaterally launch major initiatives. The right-wing congressional bloc is naturally pro-U.S., giving Washington ample leverage: it can pressure right-wing lawmakers directly, offer incentives, and simultaneously wield tariffs and trade barriers to constrain Brazilian exports. Lula must walk a tightrope—balancing stable cooperation with China against necessary compromises with the U.S. Flávio, meanwhile, may have lost the presidency—but he retains leadership of the largest party in Congress, making him no loser at all. Over the next four years, the Liberal Party will serve as a natural roadblock, closely monitoring every misstep of Lula’s administration.

After eight years of U.S.-China relations, who is footing the bill for soybeans?

In Q1 2026, China’s imports of pork from the U.S. fell to just 10,000 tons, while chicken imports dropped 45.3% year-on-year to 19,281 tons. Domestically, both the pork and poultry sectors are experiencing structural oversupply, and demand for U.S. meat imports is expected to contract further. China’s grain import volume has declined for four consecutive years. After the 2016 supply-side reforms, grain imports surged temporarily—but since 2021, food self-sufficiency has been elevated to a top national priority. In 2025, China imported 140 million tons of grain—24 million tons less than the peak level. This marks the first time in nearly 30 years of China’s grain trade history that import volumes have fallen for four straight years. Corn imports totaled 2.65 million tons in 2025—a sharp 81% decline year-on-year—and no U.S. corn was imported for six consecutive months after July 2025. Wheat imports stood at 3.89 million tons in 2025, far below the 11 million tons imported in 2024—a 65% drop year-on-year. U.S. agricultural production costs have approached historic highs. Recent U.S. moves toward deglobalization—compounded by geopolitical tensions in Ukraine and the Middle East—have driven up farm input costs continuously. From January to October 2024, tariffs on agricultural inputs raised costs by nearly $1 billion. Tariffs on agricultural tractors reached 15%; herbicides and insecticides faced tariffs as high as 25%, significantly inflating overall cultivation expenses. According to a February 2026 report released by the American Farm Bureau Federation, U.S. farm bankruptcy filings hit 315 in 2025—an increase of 46% year-on-year—and the highest level since 2020, marking the second consecutive year of rising bankruptcies. U.S. agriculture urgently needs to regain access to the Chinese market to absorb its surplus capacity—the mounting cost burden is already undermining its global competitiveness. South American agricultural products are rapidly filling the market space vacated by the U.S. Argentina—long dubbed the world’s granary and meat locker—was historically one of the few countries with high agricultural export tariffs: soybean export duties remained at 33% for years, while soybean meal and oil were taxed at 31%, and corn and wheat at 12%. By contrast, the U.S. and Brazil typically impose zero export tariffs—and some even offer export rebates. Since President Milei took office, Argentina has pursued free-market reforms, repeatedly lowering agricultural export duties. Farmers’ returns have risen noticeably, and export volumes have expanded rapidly. At the same time, cooperation between Argentina and China in finance, technology, agricultural investment, and infrastructure has deepened year by year.

Soybeans Hit 2-Month Low as Lula’s Win Lifts China Trade Outlook

6 days ago

Soybean futures fell to a two-month low after Brazil's Lula won re-election, boosting expectations of increased exports to China. The shift threatens US market share as Brazil dominates Asian imports.

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