Brazil Rolls Out $5.5bn Lifeline to Counter US Tariffs

Brazil’s government has launched a massive support package to cushion exporters hit by Washington’s steep new tariffs.

The plan, dubbed “Sovereign Brazil”, was unveiled Wednesday and promises a 30 billion reais ($5.5bn) credit line to help businesses weather the 50 percent tariff the United States slapped on Brazilian goods.

President Luiz Inacio Lula da Silva called the move a first step. He told exporters that the country won’t fold under pressure.

“We cannot be scared, nervous and anxious when there is a crisis. A crisis is for us to create new things,” Lula said. “In this case, what is unpleasant is that the reasons given to impose sanctions against Brazil do not exist.”

The rollout included rare attendance from congressional leaders at Lula’s side — a sign that Washington’s trade war may be rallying political support at home.

Alongside the credit program, Brazil will delay tax payments for affected companies, hand out 5 billion reais ($926,000) in tax credits for small and medium businesses through 2026, expand insurance for cancelled orders, and encourage public purchases of goods that can’t be sold to the US.

The measures take effect immediately, but they’ll only last four months unless Congress extends them.

The impact of the tariffs has already been sharp. Brazil’s beef industry, a heavyweight in global trade, warned in July that exports to the US could become “economically unfeasible.”

The politics around the tariff fight are just as heated. US President Donald Trump has tied the penalties directly to the legal troubles of his ally and Brazil’s former president Jair Bolsonaro, who is under house arrest. The White House accused Lula’s government of “persecution, intimidation, harassment, censorship, and prosecution” of Bolsonaro and his supporters, calling them human rights violations.

Bolsonaro is facing accusations that he tried to orchestrate a coup after losing the 2022 election.