The Lula government's actions regarding the tariff hike generate criticism from the financial market

President Luiz Inácio Lula da Silva's (PT) stance on the tariff hike imposed by Donald Trump on the country led to two embarrassing situations for government representatives during an event with key financial market leaders in São Paulo.

The Minister of Transport, Renan Filho, and the president of the PT, Edinho Silva, were targets of demonstrations during the XP Expert plenary session on the electoral scenario, which was attended by the president of União Brasil, Antônio de Rueda, as well as the mayor of Recife, João Campos (PSB).

The episode with Renan occurred when the minister was responding to an accusation from Rueda that the president had "provoked" Trump's reaction by positioning himself as an ally of the BRICS countries.

"Yes, President Lula provoked and deposed this situation. There's no way to say it didn't happen," Rueda accused. "While the Western world defended Ukraine, the president [Lula] went there to defend Russia, applaud, and pose for photos with Ramzan Kadyrov. This has a cost."

Renan reinforced Lula's efforts to promote negotiations by placing Vice President Geraldo Alckmin as his interlocutor. "Just today, the president, at a ceremony in Osasco, said that Alckmin is representing Brazil in the negotiations. He is one of the most qualified individuals, a four-time governor of São Paulo, experienced, calm, and willing to talk to the United States," the minister said.

The panel's moderator, Rafael Furlanetti, XP's Director of Investor Relations, intervened. "But, Minister, shouldn't the president be negotiating in the United States instead of in Osasco?" he asked. There was laughter and applause from the audience, despite the moderator's plea.

Financial market questions alternative to the dollar

At another point, Edinho Silva justified the commercial reasons that made the tariff negotiations possible, such as a US$400 billion surplus between the United States and Brazil in recent years.

"If the issue is the trade balance, Brazil's effort is immense. We officially proposed negotiations in May," said the PT president. "Now, if the issue is retaliation for Brazil's participation in alliances, that's another debate. Any country in the world has the right to multilateralism. It has the right to negotiate with other countries, to build trade and ideological blocs."

Furlanetti asked: "But President, do you agree that every time someone has threatened the hegemony of the American currency in the history of the world, it has never worked?" He was referring to Lula's questioning of the dollar's hegemony and working with China to change the monetary standard. There was renewed applause and laughter from the audience.

Silva argued that the United States prioritized the Free Trade Area of the Americas (FTAA), then the European Community, and the world didn't react. "But when Brazil began, in the early 21st century, to engage in dialogue with countries like China, India, and South Africa, did that become a problem? The democratic world cannot react with authoritarianism when a country seeks relationships outside the hegemonic logic."

Bolsonarism will remain isolated, says Renan

The panel hosted by XP at the country's largest financial market event also addressed the government's fiscal difficulties and the prospect of President Lula's reelection.

After Trump's tariff hike, opinion polls showed President Lula's unpopularity declined due to his confrontation with the US president. The perception is that Bolsonarism is facing erosion among its own supporters due to US retaliation against Brazil.

Minister Renan Filho accused Federal Deputy Eduardo Bolsonaro (PL-SP) of attacking democracy and said that Bolsonarism is on its way to becoming isolated among the far right. He believes Lula has the ability to discuss a new broad front for the 2026 elections, moving closer to the center.

"I think President Lula is well placed to hold this debate, rebuilding a broad front, presenting a project for the country that brings together, in addition to the center-left, a larger part of the center itself. In my view, there's a strong possibility of isolating Bolsonarism within the far right, as they move in that direction every day," the minister stated.