Brazil’s Lula announces $5.5 billion in credits for exporters hit by US tariffs
SAO PAULO (AP) — The Brazilian government on Wednesday unveiled a plan to support local exporters affected by a 50% tariff imposed by U.S. President Donald Trump on several products from the South American nation.
Dubbed “Sovereign Brazil,” the plan provides for a credit lifeline of 30 billion reais ($5.5 billion), among other measures.
Brazil’s President Luiz Inácio Lula da Silva described the plan, which includes a bill to be sent to Congress, as a first step to help local exporters. Congressional leaders attended Wednesday’s ceremony, a first in months, in a sign of growing political support for the leftist leader in response to Trump’s tariffs.
Other measures announced by the Brazilian government include postponing tax charges for companies affected by U.S. tariffs, providing 5 billion reais ($930,000) in tax credits to small and medium-sized companies until the end of 2026 and expanding access to insurance against cancelled orders. The plan also incentivizes public purchases of items that could not be exported to the U.S.
Brazil’s government is also granting a one-year extension of tax credits for companies that import items so they can produce goods for exportation. That mechanism is called “drawback.”
“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.”
Trump has directly tied 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.
“Our American friends, every time they decide to fight with someone, they try to create an image of a devil against the people they want to fight with,” added Lula, who pledged to find markets to buy Brazilian goods that will not go to the U.S. “Now they want to talk about human rights in Brazil… We have to look at what happens in the country that is accusing Brazil.”
Trump has repeated a narrative pushed by Bolsonaro allies, which claims the former Brazilian president’s prosecution for attempting to overturn his 2022 election loss is part of a “deliberate breakdown in the rule of law,” with the government engaging in “politically motivated intimidation” and committing “human rights abuses.”
Lula said that Brazil’s judiciary is independent. The executive branch, which manages foreign relations, has no control over Supreme Court justices, who in turn have stated they won’t yield to political pressure. Bolsonaro’s trial is expected to come to the sentencing phase between September and October.
Justice Alexandre de Moraes, who oversees the case against Bolsonaro, was sanctioned under the U.S. Magnitsky Act, which is supposed to target serious human rights offenders. De Moraes has argued that defendants were granted full due process and said he would ignore the sanctions and continue his work.
Brazil’s president added that “for now” he will not use the country’s reciprocity law to impose higher tariffs on American imports coming to Brazil.
“We like to negotiate,” Lula said. “We don’t want conflict. I don’t want conflict with Uruguay, Venezuela, or even the U.S. The only thing we need to demand is that our sovereignty is untouchable, and that no one should have any say in what we should do.”
Brazil’s finance minister Fernando Haddad said in his speech that his country “is being sanctioned for being more democratic than its aggressor.”
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By MAURICIO SAVARESE
Associated Press
