Brazil is experiencing a moment of institutional strain, marked by political turbulence, economic pressure, and shifting international dynamics. In Rio de Janeiro, the arrest of Alerj president Rodrigo Bacellar has intensified concerns about interference in investigations involving criminal factions, while at the national level Flávio Bolsonaro’s presidential ambitions are creating divisions within the right. At the same time, Congress is moving forward with a new impeachment framework, President Lula is seeking relief from U.S. trade surcharges after speaking with Donald Trump, and the Central Bank is expected to maintain high interest rates despite sluggish GDP performance. Together, these developments reflect a fragmented political environment, mounting legislative disputes, and persistent economic challenges.
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President of the Alerj
Rodrigo Bacellar (União Brasil), president of the Legislative Assembly of Rio de Janeiro (Alerj), was arrested on Wednesday (03/12) by the Federal Police (PF) during Operation Unha e Carne. According to investigators, he is suspected of leaking confidential information from Operation Zargun, conducted in September, which resulted in the arrest of then–state deputy TH Joias. Minister Alexandre de Moraes, of the Supreme Federal Court (STF), ordered both his detention and removal from office. The PF states that Bacellar acted to obstruct investigations involving criminal factions and sought to influence actions within the state government. On September 2nd, the day before Zargun, he apparently phoned TH Joias to warn him about arrest warrants and advised him to destroy evidence; Joias even hired a moving truck to remove materials.
Bolsonaro Family
Leaders of the Centrão have expressed resistance to Senator Flávio Bolsonaro (PL) as a presidential candidate for the right-wing field. His decision to launch himself as heir to his father’s political legacy risks fragmenting conservative support. The prevailing assessment is that insisting on a Bolsonaro-family candidacy — despite the former president’s conviction and imprisonment — could divide the right in the first round. Governor Tarcísio de Freitas (Republicanos), previously viewed as the strongest unifying name, was politically weakened by Jair Bolsonaro’s push for Flávio, despite being the preferred candidate of the Centrão and financial markets.
Relationship with the USA
After a phone call with U.S. President Donald Trump on Tuesday (02/12), President Lula said Brazil could soon see further reversals of tariffs imposed on its exports. The conversation lasted about 40 minutes and focused primarily on American surcharges affecting Brazilian goods. Lula commented on his frequent surprise at Trump’s behavior. In August, various Brazilian products were subjected to a combined 50% tariff. Following diplomatic negotiation, the U.S. removed the 10% universal tariff for several partners and later withdrew the extra 40% surcharge on specific agricultural items, such as coffee and meat. Some products, however, remain subject to the elevated rates.
New Impeachment Law
Senator Weverton Rocha is expected to present on Monday (08/12) his report on the revised Law of Crimes of Responsibility, which updates rules governing impeachment procedures. The proposal establishes updated requirements for filing complaints against high-ranking authorities, including STF justices and the President of the Republic. With no voting date scheduled, the text will be analyzed by the Constitution and Justice Committee (CCJ) in response to a preliminary decision by STF Minister Gilmar Mendes limiting the circumstances under which Court members may be removed.
Interest Rate
The Monetary Policy Committee (Copom) is expected to end 2025 with the benchmark interest rate at 15% per year, despite weak GDP performance. Economists anticipate that the Committee may soften its tone and open the door to a rate cut in 2026. Maintaining the current level is the unanimous expectation for next Wednesday’s (10/12) decision, while forecasts for the beginning of the easing cycle vary between January and March. Should this scenario unfold, new criticism from members of the Lula administration and business leaders is likely to reach the Central Bank.
GDP
Brazil’s Gross Domestic Product (GDP) grew 0.1% in the third quarter of 2025, according to the Brazilian Institute of Geography and Statistics (IBGE), totaling R$ 3.2 trillion in current values. The result points to a slight loss of momentum compared to the second quarter, when growth reached 0.3% and already showed signs of deceleration. Compared with the same period in 2024, GDP expanded by 1.8%. The quarterly figure came slightly below market projections of 0.2%, while the annual comparison marginally exceeded expectations of 1.7%.
Analysis:
Brazil is entering a phase of acute institutional stress, where political volatility, judicial tensions, and economic stagnation intersect. The arrest of Alerj president Rodrigo Bacellar deepens concerns about criminal infiltration into state structures and reinforces the fragility of Rio de Janeiro’s governance environment. At the national level, the right-wing field is fractured by Flávio Bolsonaro’s presidential ambitions, which risks diluting conservative support and weakening the bloc’s cohesion ahead of 2026. These developments unfold as Congress advances a new impeachment framework, further reshaping the balance of power between branches of government and redefining the operational boundaries of political accountability.
On the international front, President Lula’s outreach to the United States—particularly his direct conversation with President Donald Trump—signals an attempt to alleviate external economic pressures, especially the heavy tariffs imposed on Brazilian exports. Although some trade relief has already materialized, the persistence of elevated surcharges in key sectors underscores the vulnerability of Brazil’s export structure and its dependence on geopolitical alignment.
Sources: G1 [1], [2], [3]; O Globo [1], [2], [3]; A Folha de SP [1], [2], [3].
