Amid a week of high political activity and institutional movement, President Lula confirmed his candidacy for a fourth term in 2026, signaling renewed confidence in his leadership. The government also intensified its diplomatic and economic agenda, advancing trade negotiations with the United States to reverse tariff hikes on Brazilian exports. Meanwhile, in Brasília, debates over spending cuts, administrative reform, and new budgetary transparency rules highlighted both political challenges and the Executive’s efforts to maintain fiscal control. Justice Flávio Dino’s ruling on stricter accountability for state and municipal amendments added to the week’s tone of tightening oversight and institutional balance.
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Fourth Term
During his official visit to Indonesia on Thursday (23/10), President Lula confirmed his intention to seek a fourth presidential term in the 2026 elections. Standing alongside Indonesian President Prabowo Subianto, Lula stated that he will turn 80 “with the same energy I had at 30.” Although he had previously expressed uncertainty about running again due to health concerns, the president’s remarks signal a firm decision to pursue reelection. In 2022, prior to beginning his current term, Lula had said his focus was not on future elections but on “leaving the country prepared.”
Tariff Reduction
Vice President Geraldo Alckmin announced on Wednesday (22/10) that trade discussions with the United States are advancing, with Brazilian coffee—currently subject to a 50% tariff hike—among the government’s top priorities. Speaking to business leaders and coffee industry representatives, Alckmin reaffirmed that Brazil’s primary goal, agreed upon with U.S. Secretary of State Marco Rubio, is to suspend the tariff increase while broader trade negotiations continue. Should this effort fail, Brazil’s plan B involves expanding the list of products exempted from the tariff, starting with items previously identified by Donald Trump’s administration as essential imports due to their scarcity in the U.S.
Spending Cuts
The Speaker of the Chamber of Deputies, Hugo Motta (Republicans), assured the government that he would schedule a vote next week on the administration’s proposed spending cuts bill. However, Motta urged Minister of Institutional Relations Gleisi Hoffmann to accelerate the implementation of the 2025 Federal Budget, emphasizing that delays in fund disbursement have created a backlog and hindered the release of resources for parliamentary amendments.
Administrative Reform
The Proposed Constitutional Amendment (PEC) for administrative reform, introduced 20 days ago, remains stalled in the Chamber of Deputies and lacks the 171 signatures required for formal submission. Lawmakers have been hesitant to endorse the measure amid concerns about potential backlash from public servants—a key electoral base in 2026—as well as the fallout from the recent rejection of the Shielding PEC. Speaker Hugo Motta has been personally reaching out to party leaders and caucuses to gather the necessary support and secure the amendment’s registration.
Strict Rules
Justice Flávio Dino of the Federal Supreme Court (STF) ruled on Thursday (23/10) that state and municipal amendments must follow the same transparency and traceability standards required for federal parliamentary funds. The decision, which will take effect in 2026, mandates oversight by State and Municipal Audit Courts, as well as by Public Accounts Ministries and Attorney General’s Offices, to ensure compliance with federal-level transparency norms in budgetary processes and the execution of legislative amendments.
Analysis:
President Lula’s confirmation of his 2026 reelection bid marks a pivotal moment in Brazil’s political landscape, reflecting both confidence in his lasting influence and a strategic effort to consolidate support ahead of a competitive race. Announcing his candidacy during an international trip projected an image of stability and global relevance, contrasting with the turbulence of previous administrations. The move also aims to preserve momentum amid economic challenges and internal strains within the ruling coalition over fiscal and administrative priorities.
At the same time, the government’s renewed diplomatic engagement with the United States shows a pragmatic focus on defending Brazil’s economic interests. Ongoing talks to reverse tariff hikes on exports such as coffee combine short-term relief for affected sectors with longer-term goals of reinforcing bilateral trade relations and sustaining economic credibility.
Domestically, developments in Congress and the Judiciary point to stronger institutional accountability. Speaker Hugo Motta’s pledge to advance spending cuts signals shared concern over fiscal responsibility, while Justice Flávio Dino’s decision to extend transparency rules to state and municipal amendments represents progress toward a more uniform and traceable budget process.
