Brazil bolsters economy in response to U.S. tariffs
Aug. 20 (UPI) -- After Washington imposed 50% tariffs on Brazilian exports, President Luiz Inácio Lula da Silva's government launched the Sovereign Brazil Plan, a $5.5 billion emergency package combining subsidized credit and guarantees for the hardest-hit exporters.
The initiative also includes tax deferrals, tax credits through 2026, expanded access to insurance against canceled orders and public purchases to absorb agricultural and industrial surpluses.
The aid -- tied to preserving jobs -- is paired with a diplomatic push and efforts to open new markets to prevent production cuts and protect growth.
"We cannot be scared, nervous or anxious when there is a crisis. A crisis is for creating new things," Lula said Aug. 13 as he presented the measures.
According to Brazil's Ministry of Development, Industry, Commerce and Services, the 50% tariff imposed by the United States affects 35.9% of Brazilian exports to the U.S. market. That was equal to $14.5 billion out of $40.4 billion in 2024, hitting key goods such as coffee, beef and sugar.
In the short term, the Sovereign Brazil Plan will serve as a liquidity and risk buffer for the hardest-hit companies, providing loans and guarantees to ease cash shortages and prevent production shutdowns.
At the same time, public purchases will act as a "demand floor" for sectors facing perishability or sudden drops in orders -- including meat, fruit and seafood -- to stabilize producers' income and prevent ripple effects in transport, logistics and services.
The measure also buys time for the external track of the plan: challenging the unilateral tariffs at the World Trade Organization and, foremost, diversifying markets.
According to the Brazilian government, 397 new markets have opened in less than three years, expanding the customer base for "Made in Brazil" products.
With partial access to the U.S. market cut off, Brazil has moved on two fronts: the BRICS/Global South and deeper trade agreements with China.
According to Brazil's presidency, Lula and Indian Prime Minister Narendra Modi spoke by phone Aug. 7 to discuss the economic situation and the unilateral tariffs that have hit both countries hardest.
Lula and Modi agreed to strengthen bilateral trade and pledged to expand the Mercosur-India agreement to raise exchanges to more than $20 billion before 2030. They are preparing visits and business missions to open opportunities in trade, defense, energy and technology.
With China -- its main partner -- Brazil relies on a strategic relationship backed by about $4.7 billion in Chinese investment in infrastructure, renewable energy and agribusiness, helping redirect exports and reduce dependence on the dollar.
At the regional level, Ecuadorian President Daniel Noboa met Monday with Lula in Brasília, where they agreed to boost bilateral trade and coordinate responses to what they see as U.S. protectionism.
Brazil also signaled it was willing to lower tariffs on some Ecuadorian products hit with an additional 15% U.S. duty, which affected exports of bananas, shrimp and flowers.
In recent months, Brazil has revived its Mercosur agreement with the European Union, reached a deal with the European Free Trade Association and advanced negotiations with the Gulf states and Canada, along with new contacts with Vietnam.
Ricardo Alban, president of the National Confederation of Industry, called the federal government's measures positive steps to mitigate the impact of the 50% U.S. tariff on Brazilian exporters.
"We welcome these measures because they address many of the demands raised by industries, federations and industry associations, and also because they include two basic principles: continuing negotiations as a priority and adopting new measures if needed," Alban said.
Brazil's National Confederation of Commerce in Goods, Services and Tourism said reducing risks in foreign trade requires diversifying markets, expanding trade agreements and strengthening economic diplomacy.
The group also called for steps to contain production costs, rising prices and slowing economic activity, while preserving jobs and supporting solid growth in Brazil.
The International Monetary Fund projects Brazil's economy will grow 2.3% in 2025, down from 3.4% in 2024.
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New York Post
26 minutes ago
- New York Post
Trump's White House merch room thrust into spotlight after Zelensky pictured with ‘4 more years' hat
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Bloomberg
27 minutes ago
- Bloomberg
Retailers Have to Be Imaginative, Mickey Drexler Says
00:00 You have been doing this a long time. You understand consumer trends? Well, yeah, I understand. Not always. Yeah, I've been doing it. I practiced my craft. Yeah, for 50 plus years. 50 plus. Just. Just repetitious repetition. All right? You're not to be modest. No, no, but. But. But one reason why we love having you on is because when we talk on the show about the health of the consumer, we always look at it through the economic lens. But there are a lot of other factors that determine what we buy, how much we're willing to spend on what we buy, and then, of course, whether we continue that. When you look at the state of specialty apparel right now, what does it say to you? Well, I'm a tough critic. First on myself and then on everyone else. I think the specialty and it's really a good group, all retailers. And I think the days of a kind of merchandising centric pick the goods. You know, I have a little hobby of listening to founder, so great companies, reading articles, etc., etc.. And you know, words appear on the sun, everyone. Enzo Ferrari, Steve Jobs, the Michelin Brothers, the common thread instinct, gut and intuition because you can't run those companies. And of course I watched Steve for 16 years and that's what to me, that's the business. I think it's true in any business. Yeah. So when I look around and you know gut instinct, gut I mean, not to belittle that, but that seems a little bit more esoteric, particularly in a time where we're dealing with very real world issues, economic pressures, tariffs. I mean, you know, just being able to source goods at this point right now is just mind boggling. Not just the costs, but just not even knowing what's the right tariff rate you're going to pay today versus tomorrow. So how do you do that? Well, I don't the esoteric you know, you have to put, you know, as an artist, a great painter, esoteric designer, I think esoteric, whatever it actually means. Exactly. I'm not sure what it means, you know, but it's a qualification in the creative world and in the merchandising world. How do you know if something's a best seller or not? You know, I will not pick colors. It will not tell you what's a bestseller and da da da. And of course, it'll probably eliminate a number of jobs. So I think the world underestimates that. I was listening this morning to I do my rehearsals for the show, Bloomberg and CNBC, sorry to say. Yeah. And whoever the other one never heard never heard of it. And it was interesting how the fellow who was the guest and a guy who's been in the retail business a life retired, was talking about Target and saying about a financial person and there's nothing wrong. Look, I could never be a CFO in my life, but they were saying Target used to be my word, target. What do you need to run that? And the numbers don't create the products. And it's kind of like, look, I don't I could be an accountant, but I couldn't be a chef. But if you put the restaurant's accountant as the chef, it's no different. Then you need merchants, right? And this guy was saying it, and I'm going to get in touch with him because I don't know his context. Yeah, but but it's. It's kind of a misunderstood concept. Yeah. Way. Right, Right. So let's follow on that, because we named a whole bunch of companies and said one of them that didn't do well is TJX. And they have this incredible business model where it's off price goods catering to a high household income. I idolize her, Carol. Or tell me more what you say. But from what I looked at, they were four comp and 10% increase in earnings. We do business with them. And Carol, long term and she doesn't like me to praise her like this fact. I'm seeing her this weekend for a coffee. And you're talking about Carol, Michael Myer chair. She's the best and she's a merchant and she's a wonderful person and she knows who she is down to earth. But they buy the goods from all the places who the biggest customers of the wholesale brands in a lot of cases and the wholesale brands sell their goods to the department store retailers and they kind of pay for markdowns. They her prices, the real prices you see. Right. You go into T.J., Max, and that's the price. So is that a case there where they just have a really great business model, or is it that they have exceptional execution? Which do you give credit to? Well, any great business model is dependent upon the great. Leader of that business. And T.J., Max has always been. They buy the goods from all of us. They negotiate like crazy and they put it out at a price. And they don't have assistant buyer's day or prime day or whatever. It's a very honest model. And that's looked, what, 50 billion? 60 billion. But I'm curious and we don't have time for why it wasn't a good report and. Yeah. Well, yeah, but it gets to this idea though, too. I mean, their model has been resilient and we know that. Yeah, but it decidedly was always supposed to be a value model for those companies that maybe didn't have that model. So you take the gaps and Abercrombie's and all of those names there, all of those companies at one point in their history have fallen victim to that sort of perpetual discounting that there's still a group of them that's in that. There are some have managed to try to wiggle themselves out of that. But I am curious as to how you do that, if that wasn't your model to begin with and you have found yourself trapped in that, how do you get out without simply going under, reinvent, move forward? Imagination. I mean, for me, that's I never thought about the answers to that, but I always lived in my imagination and I always was very critical. But I learned from the best in the business and not the retail business. I mean, I'm learning about these founders and the extraordinary stories, but it's not always the founders. I mean, I mean, we talk about and we can go down memory lane for a quick second, so just bear with me, Scott. But I mean, we go back to the late sixties, early seventies, when the Fishers founded Gap, which was basically just a reseller of jeans and records and other stuff. Some point I remember the exact year you come into the picture and you completely reimagine what they sold from very colorful, a wide variety of stuff to basics. Simple, but with it. No, that was you. That was your was the number one ingredient. That was part of the concept. Oh, yeah. Get up. In all respect to Dawn, help me in my life. Sure. Gap was a discounter. Okay. It was pure discount 20. It would start as a Levi business, and Gap was discounting Levi's when I got there, two for $26 or whatever. I went to Houston Galleria. I said, What do I get myself into? There's on the windshields, there's these what do they call those little things under the windshield? The flyers, the flyers. I look at one where I today only get 30% off and it was a nightmare, but I didn't say, Well, I'm going to reimagine it. It was inside. You have a vision. I used to live in my imagination as a kid for a lot of other reasons. But if and a lot of founders, by the way, and Don knew this when they hit a wall in 19, I got there in 1980 or 83, he knew I mean, it was two or three people. No one could do the job. You imagine it. Old Navy was an imagination, came from Old Navy, named after a bar in Paris. So weird. Who is out there right now? What company is out there? What merchant out there is doing that imagining is getting people excited about their specialty apparel. Well, yeah, well, the customers would answer that better than me. I am so critical of me and everything we do. You can ask my team. They call me the pain in the ass. And that's what they did. They did an email or whatever. I don't know if you can put that on the air, but. Well, it's like I respect companies that build great businesses long term and you don't turn around a company in a year or two or three. Well, but I'm curious, though, on that point, because I think the last time we were here, we talked a lot about kind of the re-emergence of Abercrombie and Fitch, certainly in terms of its stock price, its revenue. Just earlier this week, Bloomberg did a great story talking about some of the progress that has made in turning itself around. I want to see the brand, and I know it's so early and I want to be fair to the CEO over there living wall and what she's doing. But I do I am curious about when these CEOs and whatever their background are trying to turn around these companies. Why isn't sort of the MBA, the CFO, the CEO types, not necessarily the ones in your mind that can do that best? Yeah, it's an art and a science, this business. And and Libby and I worked together for 15 plus years in Gap and She's terrific. But I always ask the customer, I work for customers and I go into all of our competitors. I schmooze with the salespeople and Gap and I know a lot of people made, well, Old Navy, but you have to find out from the consumer, and I have a judgment I make, like I hate to say the car industry, I look. Today. And I'm an old guy. I've been around a million years and I like nice things. Getting the Bronx, which taught me all that. But if you look at the card designs today, where are the great classics you look at? I mean, designer clothes. It should only happen to us. But the consumer has changed. Logos forget about and. And the fakes. It's not so prestigious to carry some fancy dinner. That's right. Well, consumer tastes have changed, especially with Gen Z. And we see that in what they think of as stylish. I mean, there's a lot of what's popular right now is stuff from the eighties or nineties and, you know, concert band t shirts are seen as a brand in and of themselves. How what what are customers telling you really when you look at the customer and what they favoring what they favor what does that tell you about where we are in the cycle. I first of all, looking at customers, I never done a focus group that I've liked in my life. But what I do is I look, you have to every company has to surround and I'm lucky. Well, not lucky If you don't have the top talent who can answer those questions, then you don't have the right people. We have a vision. We have a vision. My vision is clothes that never expire. The always taste is stylish. Who defines that? Our team does. What brands excites you right now? And don't say Alex Mill, but take Alex Mill out of the equation. I mean, what brands excite you when you look at them and you say they're doing this right, or at least right enough? Well, if you talk style, first of all, I can't mention brands because they've all upset some friends. You know, there's very few where I walk into a shop or I walk down the street. What I don't there's some really good ones. Okay. I'll let you off the hook on that. But but to kind of build on that question, though, too, with the way people shop, do you think that the stand alone retailer is sort of the single brand retailers like Abercrombie Gap can compete or are better at merchandising than, say, the multi-line retailers like a Target or and the higher end like a Bloomingdales. You give me a name and I'll tell you who's good. Every business has a name, has a founder and founders. You know, after ten years or so of five, that time is up. Great inventions. But I don't think Well, look, go look at the factory outlets. My good friend Steve Vail off is CEO of Tanger. Yeah, we have him on. He's terrific. Steve We worked together for years at Gap. But look at look at the factory store relationships to their regular price stores. Factory business is a great way for companies to cash quick put it on sale. This whole world is a discount world. You know, you look on the three major networks and everything's 50 off. It's a game. They used to be legal, I think, to have these fake high prices. Yeah, Yeah. And now it's all that.
Miami Herald
an hour ago
- Miami Herald
Brazil bolsters economy in response to U.S. tariffs
Aug. 20 (UPI) -- After Washington imposed 50% tariffs on Brazilian exports, President Luiz Inácio Lula da Silva's government launched the Sovereign Brazil Plan, a $5.5 billion emergency package combining subsidized credit and guarantees for the hardest-hit exporters. The initiative also includes tax deferrals, tax credits through 2026, expanded access to insurance against canceled orders and public purchases to absorb agricultural and industrial surpluses. The aid -- tied to preserving jobs -- is paired with a diplomatic push and efforts to open new markets to prevent production cuts and protect growth. "We cannot be scared, nervous or anxious when there is a crisis. A crisis is for creating new things," Lula said Aug. 13 as he presented the measures. According to Brazil's Ministry of Development, Industry, Commerce and Services, the 50% tariff imposed by the United States affects 35.9% of Brazilian exports to the U.S. market. That was equal to $14.5 billion out of $40.4 billion in 2024, hitting key goods such as coffee, beef and sugar. In the short term, the Sovereign Brazil Plan will serve as a liquidity and risk buffer for the hardest-hit companies, providing loans and guarantees to ease cash shortages and prevent production shutdowns. At the same time, public purchases will act as a "demand floor" for sectors facing perishability or sudden drops in orders -- including meat, fruit and seafood -- to stabilize producers' income and prevent ripple effects in transport, logistics and services. The measure also buys time for the external track of the plan: challenging the unilateral tariffs at the World Trade Organization and, foremost, diversifying markets. According to the Brazilian government, 397 new markets have opened in less than three years, expanding the customer base for "Made in Brazil" products. With partial access to the U.S. market cut off, Brazil has moved on two fronts: the BRICS/Global South and deeper trade agreements with China. According to Brazil's presidency, Lula and Indian Prime Minister Narendra Modi spoke by phone Aug. 7 to discuss the economic situation and the unilateral tariffs that have hit both countries hardest. Lula and Modi agreed to strengthen bilateral trade and pledged to expand the Mercosur-India agreement to raise exchanges to more than $20 billion before 2030. They are preparing visits and business missions to open opportunities in trade, defense, energy and technology. With China -- its main partner -- Brazil relies on a strategic relationship backed by about $4.7 billion in Chinese investment in infrastructure, renewable energy and agribusiness, helping redirect exports and reduce dependence on the dollar. At the regional level, Ecuadorian President Daniel Noboa met Monday with Lula in Brasília, where they agreed to boost bilateral trade and coordinate responses to what they see as U.S. protectionism. Brazil also signaled it was willing to lower tariffs on some Ecuadorian products hit with an additional 15% U.S. duty, which affected exports of bananas, shrimp and flowers. In recent months, Brazil has revived its Mercosur agreement with the European Union, reached a deal with the European Free Trade Association and advanced negotiations with the Gulf states and Canada, along with new contacts with Vietnam. Ricardo Alban, president of the National Confederation of Industry, called the federal government's measures positive steps to mitigate the impact of the 50% U.S. tariff on Brazilian exporters. "We welcome these measures because they address many of the demands raised by industries, federations and industry associations, and also because they include two basic principles: continuing negotiations as a priority and adopting new measures if needed," Alban said. Brazil's National Confederation of Commerce in Goods, Services and Tourism said reducing risks in foreign trade requires diversifying markets, expanding trade agreements and strengthening economic diplomacy. The group also called for steps to contain production costs, rising prices and slowing economic activity, while preserving jobs and supporting solid growth in Brazil. The International Monetary Fund projects Brazil's economy will grow 2.3% in 2025, down from 3.4% in 2024. Copyright 2025 UPI News Corporation. All Rights Reserved.
