The Brazilian government unveiled on Wednesday (13) a Provisional Measure outlining a contingency plan to counter the impact of 50% tariffs imposed by the United States on Brazilian products. President Luiz Inácio Lula da Silva announced the measures at a ceremony in Brasília, joined by congressional leaders, nearly all cabinet ministers, and representatives from the export sector.
Named Brazil Sovereign, the package includes deferring federal taxes and contributions for affected companies and reimbursing duties on imported components paid by exporters. It also expands the “Reintegra” program, which refunds part of the taxes paid along the production chain. Large and medium-sized manufacturers will see rates rise from 0.1% to as much as 3.1%, while small and micro enterprises will receive up to 6%, compared to the current 3%. The new rates will remain in effect until December 2026, with an estimated cost of about US$1 billion.
The plan also foresees increased public purchases of perishable foods that can no longer be sold to the U.S. market, aiming to prevent further losses for exporters. Structural measures include reforming the Export Guarantee Fund (FGE) and creating export credit mechanisms worth about US$6 billion, primarily for sectors affected by the tariff hike but also open to the wider productive sector. Additional funding includes about US$300 million for the Foreign Trade Guarantee Fund (FGCE), US$400 million for the Investment Guarantee Fund (FGI), and US$200 million for the Operations Guarantee Fund (FGO). Access to these credit lines will depend on maintaining current employment levels, monitored by a new National Employment Oversight Council.
