Latest news with #SovereignBrazilPlan
Miami Herald
18 hours ago
- Business
- 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.
UPI
21 hours ago
- Business
- UPI
Brazil bolsters economy in response to U.S. tariffs
Brazilian President Luiz Inacio Lula da Silva (R) greets Ecuadorian President Daniel Noboa during a meeting at the Planalto Palace in Brasilia, Brazil, on Monday. Photo by Andre Borg/EPA 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.
CTV News
13-08-2025
- Business
- CTV News
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)
