The Brazilian government declared a new plan on Wednesday to support domestic companies affected by the 50% U.S. tariffs, as reported by The Associated Press. The initiative, Sovereign Brazil, offers 30 billion reais (approximately $5.56 billion) in low-interest loans, tax incentives, and other support measures, with a focus on small businesses and companies handling perishable goods.

Brazil’s measure includes deferring tax payments for businesses hit by U.S. tariffs, granting 5 billion reais in tax credits to small and medium-sized enterprises through the end of 2026, and broadening access to insurance for canceled export orders. The plan also encourages public procurement of goods that were unable to be exported to the U.S.

Brazilian President Luiz Inácio Lula da Silva called the plan a first step in supporting local exporters.

In his speech during the declaration, Silva rejected the U.S. government’s justification for placing tariffs on Brazilian goods.

Trump has linked the 50% tariff on numerous Brazilian imports to the legal troubles of his close ally, Brazilian former President Jair Bolsonaro, who is currently under house arrest. President Lula stated that, ‘for now,’ he will not invoke Brazil’s reciprocity law to raise tariffs on U.S. goods entering the country.
“Brazil had no reason to be taxed, and we will not accept any accusations that we do not respect human rights in Brazil and that our trial is being conducted arbitrarily,” he said.

The government is also providing a one-year extension of tax credits to companies that import materials used in the production of export goods, known as the drawback mechanism.

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