Brazil’s Lula announces US$5.5 billion in credits for exporters hit by U.S. tariffs

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)

SAO PAULO — Brazilian government on Wednesday unveiled a plan to support local exporters affected by a 50 per cent 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 (US$5.5 billion), among other measures.

Hours later, U.S. Secretary of State Marco Rubio announced new sanctions against at least two Brazilian officials, in a move the South American nation’s health minister rebuked.

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.

The leftist leader, whose poll numbers have gone up since the tariffs against his country were announced, once again said he and Trump have never spoken, and claimed the American president does not want to negotiate.

Top 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.

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Other measures announced by the Brazilian government include postponing tax charges for companies affected by U.S. tariffs, providing 5 billion reais (US$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 per cent tariff on many imported Brazilian goods to the judicial situation of his embattled ally, former President Jair Bolsonaro, who is currently under house arrest.

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.

Ricardo Alban, the chairman of the Brazilian industry confederation, said he hopes “this plan is behind us as quickly as possible.” He described it as “palliative, but necessary.”

“Nothing justifies us being on the lowest of tariffs to going to the highest of tariffs,” Alban said.

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.”

“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.

Lula repeated on Wednesday 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 sometime between September and October.

“If what happened at the Capitol (the U.S. riots on Jan. 6, 2021) had happened in Brazil, he (Trump) would be on trial here too,” Lula said.

Earlier in August, 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.

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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.”

Only hours after Lula’s plan was announced, Rubio said the U.S. would “restrict visa issuance to Cuban and complicit third-country government officials and individuals responsible for Cuba’s exploitative labor export program.”

Rubio said on X that the Brazilian government program “More Doctors,” which was started in 2013 with thousands of Cuban doctors spreading nationwide, was “an unconscionable diplomatic scam of foreign `medical missions.”'

Brazil’s Health Minister Alexandre Padilha, who was in the same job when the program was founded, later said the initiative “will survive to unjustifiable attacks from no matter who.”

“This program saves lives and it is approved by those who matter most: the Brazilian people,” Padilha said. “We will not bow to those who are against vaccines, against research, against science and now against two key people in my first tenure as health minister, Mozart Sales and Alberto Kleiman (who had their U.S. visas revoked).”

Brazil’s government says the initiative currently has almost 25,000 medical professionals operating, but did not provide figures on how many of those are Cuban.

Lawmaker Eduardo Bolsonaro, a son of the former president who is seeking amnesty for his father and others implicated in the alleged coup plot, praised the U.S government.

“This measure is a clear message: neither ministers, nor lower-tier bureaucrats nor their family members are immune. Sooner or later, everyone who contributed to support those (autocratic) regimes will answer for what they did -- and there will be no place to hide,” he said.

Earlier, Brazil’s Finance Minister Fernando Haddad said that his country “is being sanctioned for being more democratic than its aggressor.”

“We will face, as we have, many difficult situations and we shall overcome,” Haddad said. “This one comes from the outside, but unfortunately it has the support of radicalized sections of Brazil’s society.”

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Mauricio Savarese, The Associated Press