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Brazil has introduced a plan to support local companies impacted by the 50% tariff imposed by US President Donald Trump on several of the country’s exports.
Named “Sovereign Brazil,” the plan revealed during a signing ceremony at the Planalto presidential palace in Brasilia provides for a credit lifeline of 30 billion reais ($5.5 billion), among other measures.
Brazil’s President Luiz Inácio Lula da Silva referred to the plan, which includes a bill to be submitted to Congress, as a step to aid local exporters.
“We cannot be frightened, distressed, and worried during a crisis. A crisis is an opportunity to create new things,” Lula stated. “In this case, what is unfortunate is that the justifications for imposing sanctions against Brazil are unfounded.”
Several hours later, US Secretary of State Marco Rubio announced new sanctions against at least two Brazilian officials, a move that the South American nation’s health minister publicly criticized.
Key congressional leaders participated in Wednesday’s event at the presidential palace in Brasilia, the first such occasion in months. This signals an increase in political support for Lula in the face of Trump’s actions.
What does the plan consist of?
According to local media, Brazil’s measures include the deferment of tax dues for companies affected by US tariffs and granting 5 billion reais ($930,000) in tax incentives to small- and medium-sized companies until the end of 2026. Also included is extended access to insurance against cancelled orders.
Additionally, public procurement of items that can’t be exported to the US is part of the plan. Lula’s government is also offering a one-year extension on tax benefits for companies that import items for goods destined for exportation, a mechanism referred to as “drawback.”
Trump has connected the 50% tariff on numerous imported Brazilian goods with the legal circumstances of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest.
Trump asserts that Bolsonaro faces a political witch hunt, allegations that Brazil contradicts.
US accusations and trade tariffs against Brazil have inflamed the country’s political landscape and resulted in increased support and higher poll numbers for President Lula da Silva.
On Wednesday, Lula reiterated that he and Trump have never communicated and claimed that the American president has no interest in negotiation.
