Brazil’s own capitol riot

Your Balance of Power newsletter focuses on the rioting in Brazil by supporters of former President Jair Bolsonaro. [View in browser]( [Bloomberg]( The precedent was hard to ignore as key government institutions in Brazil were stormed by supporters of former President Jair Bolsonaro who ran amok in downtown Brasilia. As the destruction from yesterday’s rioting is cleaned up, the question is whether the insurrectionists will have furthered their far-right goals or instead bolstered the object of their rage, President Luiz Inacio Lula da Silva. Key reading: - [Brazil Capital Reels From Anti-Lula Rioters Who Stormed Congress]( - [Bolsonaro Issues Muted Condemnation of Riots at Brazil’s Capital]( - [Biden Calls Bolsonaro Supporters’ Attack on Capital ‘Outrageous’]( - [Brazil Justice Orders Federal District Governor Removed From Job]( - [In Pictures: Brazil Protesters Storm Government Buildings]( The scenes evoked the Jan. 6, 2021 attack on the US Capitol by Donald Trump backers: people bussed in for what looked like a coordinated assault to protest a “stolen” election; the same sense of shock as the Supreme Court, Congress and presidential palace were ransacked live on TV. But whereas in Washington the police were taken by surprise and overwhelmed, in Brasilia the authorities were criticized for failing to prevent the unrest. Lula, who was in Sao Paulo state on one of his first official engagements since assuming the presidency, quickly returned to Brasilia, decreed federal intervention to regain control and promised retribution for those responsible. Bolsonaro, who has been in Florida since last month, issued the barest of condemnations. Some are now pressing for him to be deported. Just as the fallout from the Capitol riot continues to dog US politics, so Brazil’s insurrection and the polarization it betrays will indelibly mark Lula’s third and final term. As the US example suggests, Trump’s refusal to recognize his defeat by Joe Biden undermined his party’s performance in the midterm elections, and could be traced in the Republican debacle over electing a House Speaker. He’s declared his intention to run in 2024 regardless. Yesterday’s events may yet prove an opportunity for Lula. But the situation remains febrile. Only eight days ago at his inauguration, Lula pledged to govern for all Brazilians. Whether that’s possible looks more doubtful than ever. — [Alan Crawford]( Bolsonaro supporters clash with law enforcement officers outside Congress in Brasília. Photographer: Matheus Alves/picture alliance/Getty Images [Sign up here]( for the Bloomberg Businessweek newsletter for unique perspectives and original reporting every weekday. And if you’re enjoying this newsletter, [sign up here](. Global Headlines Cooling tensions | Mexican President Andres Manuel Lopez Obrador will welcome Biden and Canadian President Justin Trudeau to Mexico City today for a summit that will seek to [ease strains]( over migration, trade and drug smuggling. Ahead of Biden’s visit, Mexican authorities arrested a son of drug lord Joaquin “El Chapo” Guzman, which AMLO’s government can point to as a sign it’s cracking down on the drug trade. - Texas Governor Greg Abbott [confronted]( Biden at the airport in El Paso yesterday with a letter criticizing “the chaos” caused by what he described as the president’s refusal to enforce border laws. Next challenge | Newly elected US House Speaker Kevin McCarthy faces an [immediate test]( to his leadership as he ushers in Republican control of the chamber with his own power diminished and his party still riven by infighting over the deal he cut to secure his position. A group of senior GOP lawmakers meets behind closed doors today to make assignments to committees, which are key to writing bills and will set the stage for multiple investigations of Biden and his administration. Labor unrest took an unusually heavy toll on ports around the world last year, and the outlook for continued instability could bring even [more upheaval]( to global supply chains this year. The 38 instances of protests or strikes affecting port operations in 2022 was more than four times as many as the previous year when the Covid pandemic upended global trade, maritime security consultancy Crisis24 said. Beijing’s timeline | China said it started changing Covid Zero restrictions before protests widely credited with prompting the shift, as Beijing sought to [counter the narrative]( that President Xi Jinping was forced to abandon a signature policy. The timeline appears to be an effort to minimize the influence that the most widespread demonstrations in China in decades had on Xi and other decision-makers. - There was [jubilation and heartache]( in cities across China as the long-awaited border reopening sparked a homecoming rush. Best of Bloomberg Opinion - [In 2023, Turkey’s Election Will Be the One to Watch: Bobby Ghosh]( - [China’s Got the Dysprosium. That’s a Problem: Andreas Kluth]( - [US and British Conservatives Are Frozen in Failure: Clive Crook]( Growing pressure | Prime Minister Rishi Sunak is meeting today with the union leaders directing the [strikes that have hobbled]( the UK for weeks. The talks come as the industrial action and scenes of disarray in the health service distract from Sunak’s attempts to assert his leadership. Explainers you can use - [What China’s Lunar New Year Treks Mean for Covid Surge]( - [How Crypto’s Meltdown Changed the Regulatory DebateÂ]( - [Putin’s Energy Gambit Fizzles as Warm Winter Saves Europe]( Chip boost | Taiwanese lawmakers passed rules that let local chip firms turn 25% of their annual research and development expenses into tax credits, part of efforts to keep cutting-edge semiconductor technologies at home and maintain the island’s [technology leadership](. Governments from Washington to Seoul are offering incentives for domestic chip production to reduce the reliance on Taiwan for advanced semiconductors and avoid future supply disruptions. - The US is in talks with Japan, the Netherlands and South Korea to [restrict semiconductor exports]( to China and needs all parties to agree on a deal, US Ambassador to Japan Rahm Emanuel said in an interview. Tune into Bloomberg TV and Radio air Balance of Power with [David Westin]( on weekdays from 12 to 1pm ET, with a second hour on Bloomberg Radio from 1 to 2pm ET. You can watch and listen on Bloomberg channels and online [here](. News to Note - President Volodymyr Zelenskiy said Ukraine is sending reinforcements to defend two front-line towns in the Donetsk region that have seen some of the [bloodiest fighting]( since Russia’s invasion. - Indonesian President Joko Widodo confirmed plans for [another cabinet change]( amid fraying ties between two major parties in the ruling coalition ahead of presidential elections next year. - The US reduced its [naval transits]( through the Taiwan Strait in 2022 to the lowest level in four years even as China stepped up military pressure on the island it vows to one day control. - South Africa’s governing African National Congress is determined to address [voter disillusionment]( over poor government services and high levels of crime, poverty and unemployment, President Cyril Ramaphosa said. - The bulk carrier ship M/V Glory has been refloated after running aground in the Suez Canal and briefly [disrupting traffic]( in a waterway vital for global trade. Thanks to the 27 people who answered the Friday quiz and congratulations to Ted Kontek, who was the first to name Italy as the country whose defense minister called into question the legitimacy of the European Central Bank’s independence from national governments and European Union authorities. And finally ... Kim Jong Un rang in the new year the way he likes best — with a fresh threat to dramatically expand North Korea’s nuclear arsenal. But this one is almost [certain to fizzle](. While Kim has repeatedly surprised his doubters with the expansion of his missile program, [Jon Herskovitz]( and [Sangmi Cha]( report, his heavily sanctioned state appears to lack the domestic capacity to quickly ramp up production of weapons-grade uranium and plutonium. Kim during a news program shown at the Yongsan Railway Station in Seoul on Jan. 1. Photographer: SOPA Images/LightRocket/Getty Images Follow Us Like getting this newsletter? [Subscribe to Bloomberg.com]( for unlimited access to trusted, data-driven journalism and subscriber-only insights. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. If a friend forwarded you this message, [sign up here]( to get it in your inbox. [Unsubscribe]( [Bloomberg.com]( [Contact Us]( Bloomberg L.P. 731 Lexington Avenue, New York, NY 10022 [Ads Powered By Liveintent]( [Ad Choices](