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2w ago

Lula Launches ‘Sovereign Brazil’ Package to Offset U.S. 50% Tariffs

A 30 billion reais credit line, tax relief, expanded insurance plus procurement incentives aim to shield exporters from new U.S. tariffs

A drone view shows the port of Santos in Brazil, July 31, 2025. REUTERS/Jorge Silva/File Photo
Image
Economy Minister Fernando Haddad, from left, Chamber of Deputies President Hugo Motta, Brazil's Vice President Geraldo Alckmin, Brazil's President Luiz Inacio Lula da Silva and Senate President Davi Alcolumbte, pose for a group photo during a signing ceremony to enact the Sovereign Brazil Plan, an aid program to support companies affected by the 50% tariffs imposed on Brazilian products in the United States, at the Planalto presidential palace in Brasilia, Brazil, Wednesday, Aug. 13, 2025. (AP Photo/Eraldo Peres)
Abrao Neto, CEO of the American Chamber of Commerce for Brazil, talks during a press conference after a meeting with Brazil's Vice President Geraldo Alckmin in Brasilia, Brazil July 16, 2025. REUTERS/Mateus Bonomi/File Photo

Overview

  • President Lula unveiled the ‘Sovereign Brazil’ package on August 13, committing 30 billion reais in credit to support exporters hit by 50% U.S. tariffs.
  • The plan includes 5 billion reais in tax credits for small and medium-sized companies through 2026, postponed tax charges and expanded insurance against canceled orders.
  • A bill detailing additional relief measures will be sent to Congress, and the presence of legislative leaders at the unveiling signaled broad political backing for Lula’s response.
  • President Trump tied the 50% duties to the judicial proceedings against former President Jair Bolsonaro and enacted them on August 6 through an order invoking emergency trade powers.
  • Brazil is preparing diplomatic negotiations, legal appeals and potential reciprocal actions as it seeks relief in international forums while consolidating domestic unity.