Brazil announced on Wednesday its plans to support local businesses affected by the 50% tariffs imposed by US President Donald Trump on several exports of the country.
The plan, called “Sovereign Brazil,” launched at the signature ceremony at Planarto Presidential Palace in Brasilia, offers a credit life of 30 billion rarer ($5.5 billion), among other measures.
Brazilian President Luis Inacio Lula da Silva has explained the plan, which includes a bill sent to Parliament as a first step towards supporting local exporters.
“When we’re in a crisis, we can’t be scared, nervous, and worried. A crisis is for us to create something new,” Lula said. “What’s uncomfortable in this case is that there is no reason given to impose sanctions against Brazil.”
Hours later, US Secretary of State Marco Rubio announced new sanctions against at least two Brazilian authorities.
Congressional leaders attended Wednesday’s ceremony at Brasilia’s Presidential Palace for the first time in months, signs of growing political support for Lula in response to Trump.
What does the plan involve?
According to local media, Brazil’s measures include tax deferrals for businesses affected by US tariffs, offering 5 billion Reais ($930,000) tax credits to small and medium-sized businesses through the end of 2026. It also includes increased access to insurance on cancelled orders.
It also includes public purchases of items that could not be exported to the US, but the Lula government has allowed companies that import items to extend their tax credits for a year so that they can produce goods for export, a mechanism known as a “downside.”
Trump has linked 50% tariffs on many imported Brazilian goods to the judicial situation of former President Jea Bolsonaro, currently under house arrest.
Trump claims that Bolsonaro is a victim of a political witch hunt, which Brazil denied and attracted the rage of President Lula, whom he accused of “intervention.”
The accusations and trade tariffs against Brasilia filled the country’s political situation, bringing support from President Lula and an increase in polls.
On Wednesday, Lula said he and Trump had never spoken to him and that he insisted that the US president didn’t want to negotiate.
Additional sources •AP
