Brazilian President Lula unveils $5.5 billion in credit provisions for exporting businesses impacted by U.S. tariffs.
In a significant move to bolster local exporters, the Brazilian government unveiled the "Sovereign Brazil" plan on August 13, 2025. This ambitious support package aims to protect businesses impacted by the 50% US import tariffs on various Brazilian goods [1][2][3].
The plan, announced in São Paulo, Brazil, is a three-pillared approach focusing on strengthening the productive sector, protecting workers, and advancing commercial diplomacy and multilateral cooperation [1][2][3].
Key aspects of the plan include:
- Affordable credit allocation: A total of BRL 30 billion (approximately $5.5 billion) will be made available from the Export Guarantee Fund (Fundo Garantidor de Exportações - FGE). This credit will prioritize companies most dependent on exports to the US, considering product type and company size. Small and medium-sized enterprises (SMEs) will receive targeted access to guaranteed funds to secure financing [1][2][3][4].
- Tax relief and extended export financing: The plan includes the suspension of taxes for exporting companies and an increase in federal tax refunds through the Reintegra program. This move aims to reduce cost burdens for exporters [1][2][3].
- Expanded access to export credit insurance and support for public procurement programs. The government encourages agencies to purchase locally produced food and other goods affected by tariffs, helping sustain demand despite US tariff barriers [1][2][3][4].
- Job preservation: The plan is conditional on maintaining employment levels, aiming to preserve jobs in sectors impacted by US tariffs [3].
- Commercial diplomacy and multilateral negotiations: The plan involves a broader political and diplomatic effort, including commercial diplomacy and multilateral negotiations, led by an Interministerial Committee to reduce dependency on the US market and diversify Brazil's trade relationships [2][3].
- Additional measures: Apart from the credit lifeline and the bill to be sent to Congress, the plan does not disclose the exact measures. However, it includes BRL 5 billion ($930 million) in tax credits for SMEs extended until the end of 2026 and expanded insurance against order cancellations [4].
The plan, codified in Provisional Measure No. 1309/2025, is positioned as an urgent response to help exporters weather the unilateral trade barriers imposed by the US government. It aims not only to alleviate immediate financial strains but also to promote strategic investment and long-term economic resilience in Brazil’s export sectors [1][2][3][5].
President Luiz Inácio Lula da Silva described the plan as a first step to help local exporters navigate the challenges posed by US tariffs. The unveiling ceremony was a sign of growing political support for President Lula da Silva in response to Trump's tariffs, with congressional leaders attending the event, a rare occurrence in recent months [6].
The plan is a response to tariffs imposed by the US government on several products from Brazil. However, the plan does not specify which products are affected by the US tariffs [7]. Trump has directly linked the 50% tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest [8].
President Lula da Silva also mentioned that the reasons given for imposing sanctions against Brazil do not exist [8]. He emphasised that the current crisis is an opportunity to create new things and advance Brazil's economic resilience.
- The three-pillared "Sovereign Brazil" plan, unveiled by the Brazilian government to aid local exporters, includes financial measures like affordable credit allocation, tax relief, and extended export financing, which are crucial in the face of the 50% US import tariffs on various Brazilian goods.
- In the realm of politics and finance, the recently announced "Sovereign Brazil" plan, aimed at protecting industries impacted by US tariffs, also involves commercial diplomacy and multilateral negotiations, with an objective to reduce dependency on the US market and diversify Brazil's trade relationships.
