Regional Summary
Governing in Reverse Every major leader in the Americas is governing against the promise that brought them to power, each betting the gap stays manageable before voters call them on it. The bet may prove right. But the risk varies sharply by country. Mark Carney made the pivot most deliberately. On the same day an Alberta court quashed the province’s separation petition on constitutional grounds, he flew to Calgary and signed a pipeline deal with Danielle Smith, Alberta’s premier — a pairing too deliberate to read as coincidence. The deal locks in a West Coast bitumen pipeline, caps Alberta’s industrial carbon price at $130 per tonne — well below where it was heading — and links carbon capture to the project. Bill C-5, the Canadian Economic Unity Act, passed the House, letting Ottawa fast-track major national projects. His “Powering Canada Strong” electricity plan rolls back Trudeau-era clean electricity rules to give natural gas more room. Mr Carney won power on a clean-technology platform; he is now legislating energy-export-led growth. Environmental groups called it a betrayal. His polls — an 11-to-15-point Liberal lead, a personal approval rating of +20 — tell him he can absorb the attacks. The commercial test comes later. No private company has agreed to lead the pipeline, and without a backer it may never be built. Mr Carney has redrawn the plan. He has not yet built the thing. Claudia Sheinbaum is managing a harder version of the same problem. Her sovereignty rhetoric — “here, foreign interests do not command” — is working for domestic audiences while she keeps every line to Washington open. Seventy-three American troops entered Mexican territory for a naval exercise in Campeche that same week. The Drug Enforcement Administration’s director told the Senate that the indictment of Sinaloa’s governor was “just the start of what’s to come in Mexico”; authorities arrested a former state security chief, and a former finance minister surrendered on cartel charges that same week. She has pushed back on three fronts: organising a National Regeneration Movement (Morena) march against an opposition governor for allowing a CIA raid, announcing that around 50 politicians are under investigation for cartel ties, and inaugurating what her government calls the largest hospital in Latin America. For now it is holding. But Pemex is deteriorating separately: output has fallen 6% to 1.65 million barrels a day, debt stands at $79 billion, and Standard & Poor’s revised its outlook on both Pemex and Mexico to negative. The EU trade agreement she will sign on May 22 is real diversification. It does not change Mexico’s dependence on the United States. In Chile, José Antonio Kast called his signature immigration promise first a “metaphor,” then a “hyperbole,” and 76% of Chileans polled — including 71% of right-leaning voters — say they had taken it literally. His cabinet is divided over whether hospitals and schools should report irregular migrants to authorities: his health minister publicly distanced herself from her own sub-secretariat’s proposal, and four former health ministers opposed it. He hit 53% disapproval — a record — just as a Codelco accounting scandal broke: a 20,000-tonne discrepancy in copper production figures that produced a criminal complaint and a congressional inquiry, adding an institutional crisis to a political one. A tax reform bill passed the finance committee after an all-night session, giving Mr Kast the legislative win he needs; the Cuenta Pública on June 1 will test whether it moves the numbers. In Brazil, Lula, the president, opened a 7-point polling lead over Flávio Bolsonaro after audio recordings placed Mr Bolsonaro negotiating R$134 million in film financing from an imprisoned banker, with a federal police investigation spreading to an offshore fund in Texas and Brazil’s supreme court scrutinising congressional amendments tied to the same production company. The lead is real. It is also borrowed: government approval sits at 39% negative and 30% positive, and Mr Lula’s personal rating of 45% floats above his administration’s record because his opponent is collapsing, not because his government is succeeding. Petrobras posted a record first-quarter net profit of R$32.7 billion while taking roughly $1 billion in losses on subsidised gasoline priced below market as oil rises with the US-Iran conflict. That pricing decision arrives before the first round. None of these gaps close themselves. Mr Carney’s pipeline still needs a private backer, and his central bank faces a rate dilemma it cannot resolve until American tariff policy becomes clearer — with about six weeks until the Canada-United States-Mexico Agreement review deadline. Ms Sheinbaum’s position depends on US arrests not reaching further into the legislature; a report that a Morena senator is in US custody has been neither confirmed nor denied by American authorities. Mr Kast has until June 1 to find a story that survives 53% disapproval and a signature promise his own voters know he did not mean literally. And Mr Lula, whose lead comes from his opponent’s scandal rather than his government’s record, needs either the scandal to hold or his numbers to improve before the campaign asks him to stand on his own. The condition across the region is not crisis — it is managed distance between what was promised and what is being done. That distance rarely stays manageable.Country Summaries
Canada
A court quashed Alberta’s separation petition on constitutional grounds — and within hours, Mark Carney was in Calgary signing a pipeline deal.
The two moves were deliberate and paired. Justice Shaina Leonard ruled the petition invalid on two grounds: the chief electoral officer should never have accepted it, because the original proposal had been rejected before the amended legislation came into force; and Alberta had breached its constitutional duty to consult Treaty 7 and Treaty 8 First Nations. The Blackfoot Confederacy and the Athabasca Chipewyan First Nation had brought the case. Danielle Smith, Alberta’s premier, called the ruling “anti-democratic” and pledged to appeal. But the court had cut off the path to an October 19 referendum — the date that had loomed over Carney’s first months in office. Carney arrived in Calgary that same day, declared “the best place for Alberta is in Canada,” and invoked the Clarity Act as the framework for any future vote. The message was plain: Ottawa can fight in court, and it can also give Alberta something to stay for.
The deal Carney signed with Ms Smith formalises a West Coast bitumen pipeline with a target construction start of September 2027. Alberta must submit a pipeline proposal to the federal Major Projects Office by July 1; the federal government will pursue national interest designation by October 1. Alberta’s industrial carbon price is capped at $130 per tonne by 2040 — $40 below the prior trajectory — and the Pathways carbon capture project is formally linked to the pipeline. The concessions are real. Environmental groups condemned them. David Eby, British Columbia’s premier, called the deal “rewarding bad behaviour.” The Bloc Québécois accused Carney of ecological betrayal. Industry offered cautious welcome: the Oil Sands Alliance said the agreement “provides greater clarity” but raises costs. The biggest gap: no private company has agreed to lead the project. Alberta is leading the project itself, and without a commercial backer, the pipeline’s viability is unconfirmed.
The pipeline deal arrived alongside Canada’s first national electricity strategy. Carney’s “Powering Canada Strong” plan targets a doubling of grid capacity by 2050 at an estimated total cost of $1 trillion. Its most loaded element was the decision to roll back the Trudeau-era Clean Electricity Regulations, giving natural gas “greater flexibility” for peak demand, reliability, and baseload. Clean Energy Canada called the move “a flip.” Carney argued there was no credible path to net zero without affordability. Together, the pipeline deal and the electricity strategy mark a deliberate shift from clean-tech-led to energy-export-led diversification — a different industrial logic than was in place two weeks ago, and one that will be tested in international climate forums for the rest of this government’s mandate.
The House of Commons passed Bill C-5, the Canadian Economic Unity Act, in the same week — the direct legislative complement to the pipeline deal, providing statutory authority to fast-track major national projects. The Liberal majority is now producing concrete institutional machinery for the economic pivot, not just announcements.
Carney can absorb the political costs, at least for now. Polls this week put the Liberal lead at 11 to 15 points, with Research Co. placing Carney’s net favourability at +20 against Pierre Poilievre’s -13. The Conservative structural problem is hardening from polling into behaviour: an analysis of 29,408 Facebook posts from 122 of 144 Conservative MPs found Poilievre mentioned in only 9.5% of them, with post volume collapsing after each floor crossing. That is not the signature of a caucus rallying behind its leader.
In Quebec, the Liberals are federally dominant — around 49% in the province — but the October provincial race is tightening: the Parti Québécois (PQ) and the Quebec Liberal Party are now in a statistical tie at roughly 29 to 30% each, with the Coalition Avenir Québec rebounding to around 18 or 19%, narrowing the PQ’s once-commanding lead. PQ leader Paul St-Pierre Plamondon claimed Ottawa may be spying on his party; Ward Elcock, a former director of the Canadian Security Intelligence Service (CSIS), a former CSIS agent, and the federal public safety minister all dismissed the claim as legally impossible — CSIS cannot investigate lawful political dissent. The episode reveals the sovereignty movement’s siege mentality more than any real threat. The Bloc’s attacks on Carney’s Alberta energy deal are a sharper concern: if that framing takes hold before the provincial vote, his Quebec polling advantage may erode.
One constraint that has not eased is the Bank of Canada’s rate dilemma. Minutes from the Bank’s April 29 meeting, published this week, confirmed “unusually elevated uncertainty”: if the Iran war keeps oil prices high, rate hikes may be needed; if new American tariffs hit, cuts may be required. Traders are pricing roughly 50 basis points of tightening by year-end. The Bank’s governing council said changes “could be expected to be small” but did not rule them out, and explicitly cited the Canada-United States-Mexico Agreement (CUSMA) review as a primary source of risk. Formal Canada-US trade talks have still not been launched, with about six weeks until the July 1 review deadline — the most pressing risk the Bank itself named.
Even as it manages these pressures at home, the government is building new relationships abroad. Canada deepened Arctic defence ties with Nordic partners this week — a structural response to reduced American reliability, not a tactical gesture. Anita Anand, the foreign affairs minister, signed a strategic partnership with Qatar covering culture, security, and visa processing; David McGuinty, the defence minister, met Gulf partners in Doha and Abu Dhabi to discuss defence and artificial intelligence. Ministers have made nine visits to the Persian Gulf since October. Carney has visited the UAE and Qatar and plans to visit Saudi Arabia. The pattern now extends well beyond investment-seeking into institutional security and technology ties — a middle-power coalition assembled piece by piece.
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- New York Times caught using AI-generated fake quote attributed to Poilievre, tightens freelancer AI policy — An April 15 New York Times article about Carney’s majority government contained an AI-hallucinated quote attributed to Conservative leader Pierre Poilievre — a fabrication that ran for over two weeks before correction on May 1. The incident, in which the Times’ own Canada bureau chief used AI to generate a summary of Poilievre’s views presented as a direct quote, prompted the paper to issue a formal warning to freelancers about AI use. (thewalrus.ca)
- Bank of Canada sees modest AI productivity gains, holds rates amid Iran war and tariff uncertainty — Michelle Alexopoulos, a deputy governor of the Bank of Canada, delivered a widely covered speech on AI’s economic impact, finding early signs of modest productivity gains but no evidence yet of widespread job displacement. Separately, minutes from the April 29 rate decision showed the Governing Council felt it could afford to be patient and hold rates steady at 2.25%, while weighing inflation risks from soaring oil prices due to the Iran war against potential economic weakness from US tariffs. (mpamag.com)
- Ontario Liberal nomination dispute over Erskine-Smith’s Scarborough Southwest loss triggers party controversy — Nate Erskine-Smith, a federal Liberal MP, narrowly lost the Ontario Liberal nomination for the Scarborough Southwest provincial byelection to businessman Ahsanul Hafiz, then filed an appeal alleging irregular voting including possible mass membership sign-ups and extra ballots. The Ontario Liberal Party stood by the result. Erskine-Smith subsequently announced he would resign his federal seat this summer and abandon further candidacy, while the controversy was described as an ‘unhelpful distraction’ for a party trying to rebuild. (cbc.ca)
- New federal New Democratic Party leader Avi Lewis tours Saskatchewan, tensions emerge with provincial NDP over energy policy — Avi Lewis, the newly elected leader of the federal New Democratic Party (NDP), conducted a five-day, eleven-stop Saskatchewan tour, visiting Indigenous communities including Cowessess First Nation to hear about unresolved land claims. Carla Beck, the provincial NDP leader, declined to meet with Lewis, reflecting tensions over his fossil fuel transition stance versus Saskatchewan’s energy realities. Lewis also pushed back on the Carney government’s new AI data centres and demanded release of a secret policing deal with China. (sasktoday.ca)
- Toronto and Montreal compete to host new NATO-aligned Defence, Security and Resilience Bank — Canada was selected to host headquarters for the Defence, Security and Resilience Bank, which will provide long-term financing for defence projects and is expected to bring 3,500 jobs and open by end of 2026. Doug Ford, Ontario’s premier, rallied business leaders for Toronto’s bid, while Quebec politicians accused Toronto of waging a ‘fear campaign’ by invoking the spectre of Quebec separation. Mr Ford disputed this characterization while backing Toronto. Mélanie Joly, the foreign minister and an MP from Montreal, acknowledged personal bias toward her home city. (nationalpost.com)
- Quebec anti-corruption unit meets Quebec Liberal Party leader Charles Milliard amid leadership race probe — Quebec’s anti-corruption unit (UPAC) met with provincial Liberal leader Charles Milliard in connection with its investigation into the Quebec Liberal Party’s leadership race that brought Pablo Rodriguez to the helm last year. Separately, Sona Lakhoyan Olivier, a member of the National Assembly, apologized in tears after the ethics commissioner found she had used her constituency office for partisan purposes during that same leadership contest. (cbc.ca)
- Honda cancels $15-billion electric-vehicle project in Ontario; Carney calls decision ‘disappointing’ — Honda Canada announced it would not proceed with a planned $15-billion electric vehicle manufacturing project in Alliston, Ontario — its first-ever annual corporate loss year at $2.7 billion. Carney called the decision ‘disappointing’ while asserting the global EV transition will continue. Honda Canada noted it had not received any of the committed federal funding. (nationalpost.com)
- Carney government signals openness to privatizing federal airports and ports — A government discussion paper and Carney’s public comments this week indicated openness to selling or amalgamating federal ports, with airports also cited as potential privatization candidates to recycle capital into new infrastructure. Pension funds have long eyed federal infrastructure as ideal long-term assets. Carney said port reform was not a ‘priority’ but confirmed the government is open to selling public assets. (thestar.com)
- Nova Scotia Liberal Party gains with former Progressive Conservative justice minister Becky Druhan joining ahead of leadership race — Becky Druhan, a former Progressive Conservative justice minister and Independent member of the legislative assembly for Lunenburg West, joined the Nova Scotia Liberal Party and announced her intention to run for party leadership, adding momentum to the Liberals’ provincial rebuild. (globalnews.ca)
- BC Conservative leadership race enters final weeks with voter verification controversy — The British Columbia Conservative Party leadership race is in its final weeks before voting closes May 23-29, with five candidates including Peter Milobar competing. A controversy emerged over the party’s use of a US-based company to verify voter identities, prompting some members to refuse to participate. The party defended the measure as essential for election security. (vancouversun.com)
Notes
Notes
Carney and Alberta's Smith sign landmark pipeline and carbon pricing deal targeting 2027 construction start
May 11–17, 2026
Carney unveils national electricity strategy to double grid capacity by 2050, with expanded role for natural gas
May 13–16, 2026
Alberta separatist petition quashed by court; Carney visits province amid secession controversy
May 14–15, 2026
New York Times caught using AI-generated fake quote attributed to Poilievre, tightens freelancer AI policy
May 11–13, 2026
Bank of Canada sees modest AI productivity gains, holds rates amid Iran war and tariff uncertainty
May 11–16, 2026
Ontario Liberal nomination dispute over Erskine-Smith's Scarborough Southwest loss triggers party controversy
May 11–17, 2026
Canada deepens Arctic and Nordic defense ties as Carney pivots toward Europe and middle powers
May 16–17, 2026
CSIS visits Quebec firearms manufacturer after Canadian sniper rifles surface in Russia
May 12–17, 2026
New federal NDP leader Avi Lewis tours Saskatchewan, tensions emerge with provincial NDP over energy policy
May 13–16, 2026
Toronto and Montreal compete to host new NATO-aligned Defence, Security and Resilience Bank
May 11–13, 2026
Quebec UPAC anti-corruption unit meets PLQ leader Charles Milliard amid leadership race probe
May 14–15, 2026
Honda cancels \$15-billion EV project in Ontario; Carney calls decision 'disappointing'
May 15, 2026
Nova Scotia Liberal Party gains with ex-PC justice minister Becky Druhan joining ahead of leadership race
May 11, 2026
BC Conservative leadership race enters final weeks with voter verification controversy
May 11–14, 2026
Quebec pre-election dynamics: PLQ-PQ polls close, CAQ gains, PQ leader alleges federal spying
May 11–16, 2026
Other
Mexico
The United States arrested Sinaloa’s former state security chief in Arizona this week, charged him with taking $100,000 a month from Los Chapitos, and the state’s former finance minister turned himself in on cartel-related charges. Terry Cole, the director of the Drug Enforcement Administration (DEA), told the Senate that the indictment of Rubén Rocha Moya, the governor, was “just the start about what’s to come in Mexico.” Jorge Castañeda, a former foreign minister, told The Guardian it was “the most tense, the most difficult situation since at least the 1980s.”
The same day as the arrests, Claudia Sheinbaum described her 18th phone call with the American president as “cordial and excellent.” The timing is not accidental. Seventy-three US Armed Forces personnel were meanwhile cleared to enter Mexican territory for a naval exercise in Campeche. In Yucatán, Ms Sheinbaum declared that “no foreign government will take the Transformation from the Mexican people” and “here, foreign interests do not command.” Both things are true: the sovereignty rhetoric does its job for domestic audiences, while every operational channel to Washington stays open.
Ms Sheinbaum’s political response runs on three tracks. The most visible was offensive: Ariadna Montiel, national president of the National Regeneration Movement (Morena), and Andrés Manuel López Beltrán, the party’s organising secretary, led a march through Chihuahua city demanding a political trial against María Eugenia Campos, the National Action Party (PAN) governor, for permitting CIA agents into the April Tarahumara laboratory raid — shifting attention from Morena’s cartel exposure to the opposition’s sovereignty violations. The march was contested: Morena claimed 20,000 attended; critics called it a failure. Counter-protesters booed Ms Montiel and Mr López Beltrán at the airport, and a video of a farmer confronting the Morena delegation spread widely. On the defensive track, Ms Sheinbaum announced that around 50 politicians are under investigation for organised crime links, declaring that “nobody who is not honest can hide beneath the halo of the Transformation.” On the third track, she inaugurated what her government described as the largest hospital in Latin America — the 669-bed Hospital O’Horán in Mérida, with 16 operating theatres and 48 specialties — and announced a 181 billion peso hospital investment plan for her presidency. “When there is no corruption, the money is enough.”
The unconfirmed report that Morena senator Enrique Inzunza Cazarez is also in US custody — denied by Mr Inzunza and not confirmed by US authorities — could extend the crisis into the legislature. Yeraldine Bonilla, the interim governor, added a further complication, claiming that the National Defence Secretariat (Sedena), not Mr Rocha Moya, had appointed the now-arrested security chief Gerardo Mérida Sánchez to his post. The military has neither confirmed nor denied this. Sedena’s silence more than 48 hours after a specific, attributable claim is itself a signal worth watching.
Pemex is deteriorating on a separate track. Ms Sheinbaum replaced Víctor Rodríguez Padilla, the chief executive — an energy academic — with Juan Carlos Carpio Fragoso, the chief financial officer, an economist who worked with her when she ran Mexico City. The appointment signals that debt management has displaced production recovery as the company’s priority: output fell 6% under Mr Rodríguez to 1.65 million barrels a day, and debt stands at $79 billion. S&P this week revised its outlook on Pemex, the Federal Electricity Commission and their subsidiaries to negative — the day after doing the same to the Mexican sovereign — and called Pemex’s standalone credit profile “unsustainable.” Public accounts documents revealed that during Mr Rodríguez’s tenure, Pemex quietly restructured 67% of its supplier debt — more than 375 billion pesos, of which over 250 billion has been pushed to 2033 — converting short-term payables into eight-year obligations. Banamex warned that Moody’s may follow S&P on the sovereign.
Against all this, Marcelo Ebrard, the economy secretary, confirmed that Mexico will sign the Global Modernized Agreement with the European Union on May 22 — the most concrete step towards trade diversification under Ms Sheinbaum. The Senate approved a formal session to receive António Costa, the EU Council president. The agreement liberalises 86% of agricultural trade and extends to manufacturing, energy, and technology. It will not undo Mexico’s dependence on the United States, but it will be real and signed.
Thirty-two days from the first World Cup group-stage match in Guadalajara, there is still no public security plan for the games in Jalisco — the Jalisco New Generation Cartel’s home state, the area most disrupted by the post-El Mencho fragmentation. The gap between the most internationally visible security test of this presidency and any visible preparation for it grows harder to explain.
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Other Stories
- Banxico launches 12 World Cup commemorative coins as interest rate cycle closes at 6.50% — The Bank of Mexico (Banxico) released a collection of 12 commemorative coins for the 2026 FIFA World Cup, including gold, silver, and bimetallic 20-peso pieces featuring Mexican host cities and cultural motifs; the coins began circulating on May 13. Separately, Banxico’s rate-cutting cycle concluded with the benchmark rate at 6.50%, triggering debate among analysts and business groups about monetary policy credibility. Victoria Rodríguez Ceja, the governor, defended the institution’s record, saying Banxico was never ‘complacent’ with inflation. Foreign investors withdrew more than 3.4 billion pesos from Cetes (short-term treasury certificates) in April amid the rate environment. (reforma.com)
- CFE retirees win court suspension against pension cuts as protests follow Sheinbaum on Yucatan tour — A federal collegiate tribunal in Nuevo León granted a provisional suspension ordering the Federal Electricity Commission (CFE) to immediately halt pension reductions affecting about 40,000 retirees, ruling the cuts were equivalent to torture and violated basic human rights. The ruling related to the ‘golden pensions’ reform enacted by Congress. Separately, Pemex and CFE retirees staged protests at multiple Sheinbaum events in Yucatán, with one retiree delivering a document to the president.
Notes
Notes
US arrests of Sinaloa officials tied to Rocha Moya cartel charges trigger sovereignty crisis and Sheinbaum political response
May 13–17, 2026
Morena mobilizes march in Chihuahua against Governor Maru Campos over CIA controversy, threatens impeachment
May 12–17, 2026
Sheinbaum inaugurates major hospitals and social infrastructure on Yucatan-Campeche tour
May 15–17, 2026
Pemex CEO Víctor Rodríguez replaced by CFO Juan Carlos Carpio amid financial pressures
May 14–17, 2026
Banxico launches 12 World Cup commemorative coins as interest rate cycle closes at 6.50%
May 11–17, 2026
García Harfuch leads federal security cabinet meeting in Michoacán to review Plan Michoacán
May 14–15, 2026
SEMAR dismantles five narco-labs in Jalisco, Nayarit, and Sinaloa linked to CJNG's 'El Jardinero'
May 15–17, 2026
CFE retirees win court suspension against pension cuts as protests follow Sheinbaum on Yucatan tour
Brazil
Audio recordings published by Intercept Brasil this week put Flávio Bolsonaro — the leading opposition presidential candidate — on tape negotiating R$134 million in film financing from an imprisoned banker, and within days the previously tied race had opened to a 7-point lead for Lula.
The recordings place Flávio in conversation with Daniel Vorcaro, founder of Banco Master and now in custody, over funding for “Dark Horse,” a biographical film about his father Jair Bolsonaro. The scandal spread quickly. The federal police opened an investigation into Havengate, a Texas-based offshore fund suspected of channelling money to Eduardo Bolsonaro’s US expenses. A digitally confirmed contract identified Eduardo as the film’s executive producer; he had denied any involvement. The Supreme Court began scrutinising parliamentary amendments tied to the production company. The attorney-general requested Eduardo’s conviction for coercion in proceedings linked to his father’s trial. The film itself opened to near-empty theatres.
The right’s response revealed fractures rather than solidarity. Tarcísio de Freitas, the São Paulo governor and the opposition’s most formidable alternative, said the audio “does not weaken Flávio’s candidacy” — and said nothing stronger. Romeu Zema called it a “turned page” — distance, not defence. Sergio Moro called for a congressional inquiry into Banco Master. Carlos Bolsonaro turned on Mr Zema for retreating. The Liberal Party (PL) convened its congressional bloc for an emergency session with Flávio, confirming the Bolsonarista machine is still mobilising behind him — but the coalition has no agreed response. Analysts cited by R7, a Brazilian broadcaster, began describing the scandal as strengthening right-wing alternatives — the clearest sign yet that the bloc is open to other candidates.
Polling confirms the damage, with caveats. Datafolha, which completed fieldwork before the audio broke, showed Lula and Flávio tied at 45% — confirming the earlier tie. AtlasIntel’s daily tracker, conducted after the scandal, showed Lula at 49.1% and Flávio at 42.6%. AtlasIntel’s numbers are volatile, and whether the lead holds beyond the immediate headlines is the question the next polls will answer. But the numbers mask a structural problem: Datafolha registered government approval at 39% negative and 30% positive. Lula’s personal approval sits at 45% — above his government’s performance rating and now above his opponent. The lead is scandal-dependent, not performance-driven.
Petrobras reported record first-quarter results this week — R$32.7 billion in net profit, up 110% quarter on quarter, production at 3.23 million barrels of oil equivalent per day, the company ranked as the world’s most profitable oil major — yet it is absorbing roughly US$1 billion in losses on subsidised gasoline held below international parity as oil prices rise with the US-Iran conflict. A rise of more than 15% is expected. Five months before the first round, the government faces a blunt choice: pass the cost to consumers and absorb the political anger, or continue absorbing losses at a company already burdened with industrial policy commitments, regional investment, and pre-election positioning. Decree 12.974, issued this week, tightens enforcement of diesel subsidies — requiring documentary proof that the subsidy passed from importers to retailers, with federal verification and penalties for non-compliance by May 31. The message is precise and politically awkward: truckers and agribusiness are protected; every other driver is not.
Decree 12.966, also issued this week, establishes a federal programme to coordinate intelligence and operations against organised crime and, explicitly, private militias. The decree landed in the same week that connections between the Bolsonaro family and Rio’s militia networks dominated headlines — context that muddies whether this is genuine security policy or well-timed politics. The militias are a genuine problem: they control over 20% of Rio de Janeiro’s territory, and convictions in February confirmed their role in the assassination of Marielle Franco. The decree names them as a target. Whether it produces real action or serves mainly as a message — issued in a week of maximum political pressure on a family with documented militia ties — is unclear.
Poder360, a Brazilian news site, reported that Lula made three requests to the American president for help extraditing Ricardo Magro, owner of the Refit company and subject of a Supreme Court arrest order and R$5.2 billion asset freeze. The requests fall outside the formal organised crime working group established at the May 7 meeting between Lula and the American president and predate the new arrangement. The 30-day tariff working group from that meeting has produced no announced outcomes — but the group has until around June 6, so the absence is not yet a signal.
Two things remain unresolved. The Superior Military Court has yet to rule on stripping rank from generals convicted over January 8 — a request pending since February 3. The Supreme Court’s full review of the suspended sentencing law for the January 8 convicts has not been scheduled, even as a Quaest poll found 52% of Brazilians oppose any sentence reduction. Both are decisions the government would prefer resolved before the campaign gets fully under way. Each additional week without a ruling adds to the wait.
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Other Stories
- Flávio Bolsonaro-Vorcaro ‘Dark Horse’ film scandal dominates week, triggering Federal Police investigation, polls shift, and Workers’ Party digital offensive — Intercept Brasil published audio recordings in which Flávio Bolsonaro, a senator for the Liberal Party (PL) and the leading opposition presidential candidate, negotiated R$134 million in financing from imprisoned banker Daniel Vorcaro of Banco Master for the biographical film ‘Dark Horse’ about Jair Bolsonaro. The revelations expanded to include Eduardo Bolsonaro’s role as executive producer, a Texas offshore fund (Havengate) under Federal Police investigation, Supreme Court scrutiny of parliamentary amendments tied to the film’s production company, and a broader crisis over Flávio’s candidacy. The Workers’ Party launched an aggressive digital campaign exploiting the scandal while Lula publicly mocked the affair. Tarcísio, Zema, Moro and Carlos Bolsonaro all weighed in. (intercept.com.br)
- Polls show Lula opening lead over Flávio Bolsonaro post-Vorcaro, Datafolha registers mixed government approval ratings — Multiple polling institutes released results this week. Datafolha showed Lula and Flávio tied at 45% in a simulated runoff prior to the Vorcaro audio leak, while AtlasIntel daily tracking conducted after the leak showed Lula opening a 7–8 point advantage (49.1% vs 42.6%). Datafolha also registered 39% negative approval of the Lula government and 30% positive, with Lula’s personal approval at 45%. A Quaest poll showed 52% of Brazilians oppose reducing sentences for Jan. 8 convicts, including Bolsonaro.
Notes
Notes
Chile
A 20,000-tonne hole in production figures turned what was meant to be a routine handover into an integrity crisis at the National Copper Corporation (Codelco), the world’s largest copper producer.
José Antonio Kast appointed Bernardo Fontaine, an economist, to chair Codelco from May 26. Fontaine arrived with what the government called a “special mandate”: an external audit of production issues and a financial review of budget overruns. A preliminary internal review found that the Chuquicamata mine had improperly included nearly 20,000 metric tonnes of copper in its 2025 production report. A congressional deputy, Mulet, filed a criminal complaint; congressional proceedings followed. Máximo Pacheco, the outgoing chair, resisted the audit at the board meeting where it was decided and disputed the government’s account of the company’s condition — but was outvoted. Whether the discrepancy reflects deliberate falsification or an accounting dispute over how copper categories are counted remains unresolved. Fontaine inherits a public integrity crisis on top of a $22.3 billion debt load and declining ore grades.
The NRP reform brought clearer good news. After a session that ran until 5am on May 15, the finance committee passed the bill’s core provisions: a corporate tax cut from 27% to 23% over 20 years, tax credits for small and medium-sized businesses, and elimination of capital gains tax on stock transactions. The committee dropped three articles, including an artificial-intelligence copyright provision. Alessandri, who chairs the chamber, projected full passage by August. Claudio Alvarado, the interior minister, then turned to the Senate, publicly calling on Social Democracy to break with the Broad Front (Frente Amplio) and Communist Party tutelage — an invitation to fracture the opposition that conservative papers amplified. The opposition filed more than 1,300 amendments; they slowed the committee but did not stop it.
Even with that legislative win, the government’s political standing is harder to read than at any point since Mr Kast took office. For the first time in five months, approval rose: Criteria put it at 38%, up from 36%; Pulso Ciudadano found 31.2%, up from 29.1% in April. But record disapproval — 53% in Criteria — tells the more important story. The pool of undecided voters shrank from 13% to 9%, and most of that movement went towards disapproval, not approval.
The clearest driver of those numbers is immigration — the issue Mr Kast built his campaign on. Having described his promise to deport 300,000 migrants on day one first as a “metaphor” and then, a day later, as a “hyperbole,” he now faces clear damage to his credibility on his strongest ground. The Criteria poll found 76% of respondents had taken the promise literally — including 71% of right-leaning respondents. At the same time, his interior sub-secretariat introduced a proposal requiring hospitals and schools to report irregular migrants to authorities. May Chomali, the health minister, publicly distanced herself, citing patient confidentiality; her own sub-secretariat backed the proposal in the same week. Four former health ministers came out against it. The cabinet was divided on its signature issue.
The right flank pressed harder. The death of Alfonso Podlech, a 90-year-old former military prosecutor convicted of crimes under the dictatorship, prompted Johannes Kaiser, leader of the libertarian PNL, to accuse Mr Kast of “lack of courage” for refusing to issue a humanitarian pardon, and to call for the resignation of Pablo Mira, the human rights under-secretary. This is the first formal cabinet resignation demand from the PNL, which sits outside the governing coalition. Issuing the pardons would have risked international condemnation; refusing drew fire from the far right. On the related question of Punta Peuco prison, Mr Kast signalled he intends to reverse Gabriel Boric’s decision to integrate the facility into the general prison population, with a broader prison reorganisation plan to follow.
Security produced two distinct stories. In the Temucuicui-Ercilla area, two armed attacks on the Carabineros, Chile’s national police force, occurred within three hours on May 14; a follow-up operation recovered high-powered weapons and the vehicle used in the strikes. The speed of successive attacks confirms what the security picture has shown for weeks: the Wallmapu Arauco Movement’s decentralised structure absorbs disruption without losing its ability to strike. The second story was institutional. Three Carabineros officers were arrested in Curanilahue alongside 12 civilians on charges of leaking intelligence to a criminal network and tampering with crime scenes. Trinidad Steinert, the security minister, said accountability would apply to “whoever falls” — framing the arrests as a sign the force polices itself. The harder reading is that a criminal network operated inside the institution long enough to alter evidence before detection, on a force being asked to do more.
June 1 brings the Cuenta Pública, Mr Kast’s first formal address to Congress. The government will point to the NRP’s passage through the finance committee as evidence that it can govern despite obstruction. The opposition will point to 53% disapproval and a collapsed immigration promise. On the current evidence, both arguments hold.
Other Stories
Other Stories
- Former president Boric returns gradually to political scene — Two months after leaving office, Gabriel Boric began reappearing in political spaces, joining the Broad Front (Frente Amplio)‘s congress process and publicly defending one of its legislators who had received threats. An internal La Moneda memo described his planned role as a “political articulator” for the left. (biobiochile.cl)
- Camila Vallejo family firm billed over 1.2 billion pesos to public hospital during Boric government — Investigative reporting revealed that a medical firm linked to former minister Camila Vallejo’s in-laws billed more than 1.2 billion pesos to a public hospital during the Boric administration. Vallejo is alleged to have omitted her mother-in-law from her patrimonial declaration. She had previously appeared at international progressive forums since leaving office. (ellibero.cl)
- Death of Carabineros officer in Puerto Varas under investigation; family disputes suicide finding and alleges information leaks — The family of Suboficial Mayor Javier Figueroa, who died in Puerto Varas, rejected the suicide finding and demanded a change of prosecutor after reserved case information appeared in media. The prosecutor’s office opened an inquiry into the alleged leak of confidential investigation materials. (adnradio.cl)
- Student protest in Santiago against education cuts and rising living costs — Thousands of students marched through central Santiago, organised by the Chilean Students’ Federation (Confech), to protest education budget cuts and rising living costs — one of the largest student demonstrations in recent months. Separately, a mayor aligned with the Chile Vamos centre-right coalition criticised health budget cuts.
Notes
Notes
Kast's megarreforma faces legislative battle as opposition files tsunami of amendments
May 10–17, 2026
Punta Peuco prison regime, death of convicted ex-military official Podlech, and indultos debate put Kast under pressure from right flank
May 14–17, 2026
Kast's campaign migration promise reframed as 'metaphor' then 'hyperbole'; proposal to have hospitals and schools report undocumented migrants triggers backlash
May 13–17, 2026
Camila Vallejo family firm billed over \$1.2 billion to public hospital during Boric government
May 15–17, 2026
Armed attacks on Carabineros escalate in Araucanía; security operations recover weapons
May 14–17, 2026
Death of Carabinero officer in Puerto Varas under investigation; family disputes suicide finding and alleges information leaks
May 15, 2026