Brazil’s presidential election risks complicating Canada’s plans for trade diversification

Canadian business leaders intent on diversifying our country’s global trade need to be aware that not every potential partner is on the anti-Trump bandwagon.

Brazil’s presidential election, which has taken an unexpected turn in recent days, is a reminder that geopolitical allegiances can change on a dime and create new challenges for exporters.

Right-wing presidential candidate Flávio Bolsonaro, son of jailed former president Jair Bolsonaro, is suddenly riding a wave of popularity. He will face leftist incumbent Luiz Inácio Lula da Silva – known as Lula for short – in a runoff vote on Oct. 25.

A potential win by Mr. Bolsonaro, an ally of U.S. President Donald Trump, would be a boon for Washington, which is exerting increasing influence in Latin America to secure access to critical minerals. Stronger ties between Brasília and Washington, however, would also complicate Brazil’s trade policies with other countries, including Canada.

With Brazil’s economy being the biggest in Latin America and the third largest in the Western Hemisphere, the country’s presidential election has implications for Canada’s goal of doubling non-U.S. exports by 2035.

During a trip to Brazil in July, Foreign Affairs Minister Anita Anand confirmed Ottawa’s desire to finalize a trade deal with the Mercosur trading bloc by the end of this year.

Mercosur is a South American common market that includes Brazil, Argentina, Bolivia, Paraguay and Uruguay. As the largest economy within that group, Brazil is leading Mercosur’s negotiations with Canada.

Last year, Canada’s merchandise trade with Mercosur amounted to $19.4-billion, with imports comprising the bulk of that total.

Brazil alone represents billions of dollars in unrealized potential for Canadian exporters, including those selling fertilizers, motor vehicles and aircraft.

Mr. Bolsonaro positions himself as a pro-business candidate who also champions fiscal reforms. But he is also signalling that if he wins the presidency, one of his top priorities would be the restoration of Brazil’s political alliance with the U.S., which has deteriorated under Mr. da Silva’s presidency.

“Brazil and America were made for each other,” Mr. Bolsonaro said in a speech at the CPAC conference earlier this year.

“America needs secure supply chains for critical materials, a reliable partner in the hemisphere, and a massive market for American goods and services,” he later said.

Brazil, in turn, needs help fighting transnational drug cartels, along with securing investment and technology, he added.

“There is no nation in the world that can help us better than the United States. And if we are aligned, no one can stop us.”

Mr. Trump has stopped short of openly backing Mr. Bolsonaro, perhaps to avoid giving credence to allegations of U.S. interference in Brazil’s election, but his preference is apparent.

When imposing tariffs on Brazil in July, 2025, Mr. Trump cited what he called “Brazil’s politically motivated persecution, intimidation, harassment, censorship, and prosecution of former Brazilian president Jair Bolsonaro.”

Opinion: Marco Rubio is rolling out the ‘Donroe Doctrine’ in Latin America

The elder Mr. Bolsonaro is serving a 27-year prison sentence for plotting a coup after he lost the 2022 election. His son appears intent on continuing the family’s political dynasty.

On Monday, Mr. Trump commented on Brazil’s first round of balloting that saw the younger Mr. Bolsonaro secure 47 per cent of the votes compared to Mr. da Silva’s 45 per cent.

Mr. Trump remarked the result was “close, ​but ​a ⁠very, very big victory. Amazing, actually,” according to a report by Reuters news agency.

Last week, The New York Times reported that officials from countries including Canada, the European Union, Japan and Australia were discussing the potential for U.S. interference in Brazil’s election, citing three unnamed diplomats. Washington has repeatedly denied allegations of political interference.

Even so, there are fears that Mr. Bolsonaro’s pursuits involving the U.S. would risk alienating Brazil’s other trading partners.

An EU-Mercosur trade agreement, for example, has provisionally been in force since May, but it seems the possibility of yet another Bolsonaro presidency in Brazil is causing consternation in Brussels and beyond.

If the EU is worried about the future of trade with Mercosur because of Mr. Bolsonaro’s pro-U.S. rhetoric, it stands to reason that Canada is, too.

After all, Prime Minister Mark Carney seems to be living rent-free in Mr. Trump’s head ever since Canada-U.S. trade talks collapsed in August. Other officials, including White House trade adviser Peter Navarro, are also obsessed with Mr. Carney.

If Mr. Bolsonaro ultimately clinches the presidency, Mr. Trump won’t hesitate to lean on his bosom buddy in Brasília for backup to cut Mr. Carney, and Canada, down to size.