BRAZIL UNVEILS ‘SOVEREIGN BRAZIL’ TO COUNTERACT US TARIFFS
Credit and tax relief are part of the Brazilian government’s strategy.
the Brazilian government has launched a financial aid package in response to the 50 percent tariffs imposed on Brazilian exports by the United States.
The plan, dubbed “Sovereign Brazil,” involves a 30 billion reais ($5.5bn) credit line for local businesses affected by the tariffs. It was announced on Wednesday by government officials.
President Luiz Inacio Lula da Silva described the initiative as a crucial first step to support Brazilian exporters. A bill will be sent to Congress to formalize the plan.
The Wednesday ceremony saw the attendance of congressional leaders,a rare occurrence in recent months. This suggests increasing political backing for the leftist president. This backing is a direct response to the US tariffs implemented by former U.S.president Donald Trump.
additional measures include the postponement of tax obligations for affected companies. Small and medium-sized businesses are eligible for 5 billion reais ($926,000) in tax credits until the end of 2026. Further, access to insurance against order cancellations will be expanded. The plan also encourages the Brazilian government to purchase goods previously destined for the US market.
These immediate measures come into effect promptly, but they require Congressional approval to remain in place for more then four months.
“We must not be intimidated during a crisis. A crisis presents an opportunity to innovate,” president Lula stated. “In this instance,the justifications for the sanctions against brazil are unfounded.”
The tariffs have severely impacted various Brazilian sectors,including the beef industry. In July, when Trump first announced the tariffs, Robert Perosa, president of the brazilian beef Exporters Associations (ABIEC), stated that the tariffs would make exporting to the US “economically unfeasible.”
Trump has directly linked the tariffs to the legal situation of former Brazilian President Jair Bolsonaro,who is currently under house arrest.
The White House stated in late July that the tariffs were imposed due to “politically motivated persecution, intimidation, harassment, censorship, and prosecution” of Bolsonaro and his supporters.The White House contends that these actions constitute “serious human rights abuses that have undermined the rule of law in Brazil.”
Bolsonaro faces allegations of attempting to orchestrate a coup after losing the 2022 election.
