Brazil rolls out financing to offset new US tariff

Brazil is moving quickly to mitigate the impact of the United States’ new 25% import tariff on its goods, with a series of measures to aid rural and agricultural sectors of Latin America’s biggest economy.

The administration of President Luiz Inácio Lula da Silva issued executive an order on Thursday granting some BRL13 billion ($2.5 billion) in credit for ​rural development programs, including BRL9 billion to boost productivity and competitiveness.

In addition, the government announced debt-refinancing initiatives amounting to BRL3 billion, and sugarcane growers in the country’s less-developed northeast region will benefit from additional subsidies totaling BRL270 million.

National development bank BNDES has also asked the Brazilian Treasury to release BRL7.5 billion in credit lines to allow the lender grant cheaper funding to companies affected by the new US tariff, according to Folha de São Paulo, a local newspaper.

CREDIT LINES

Brazilian goods were hit by levies of up to 50% after US President Donald Trump imposed sweeping tariffs on a range on its trading partners last year, though the measure was subsequently relaxed.

Since last year’s tariffs took effect, Brazil’s Treasury has released BRL7.75 billion in cheaper credit lines to boost companies’ working capital and allow them to invest. The financing comprises 20 year-loans, including four-year grace periods, and interest rates of between 7.9% and 13.5%, below the country’s current base rate of 14.25%.

Brazilian officials have said the country will retaliate against the tariff announced on Wednesday by the United States Trade Representative. Vice president Geraldo Alckmin said the country would use its economic reciprocity law against US goods “at the right time.”

ALTERNATE MARKETS

Some 18% of Brazilian shipments to the US, or $7.4 billion of goods, will be affected by the tariff, according to official estimates.

Yet, Brazil has shown itself more than capable of withstanding US tariffs before and Washington’s latest trade salvo could backfire, according to the Petersen Institute of International Economics.

“Since the first round of US tariffs in 2025, Brazil has posted record exports, with China absorbing some 37 percent of its trade at the end of 2025,” the institute said in a statement Friday. “Shipments to India are up more than 50 percent, while the US share of Brazil’s trade is at a record low.”

Furthermore, the country’s reciprocity law could see “the suspension of intellectual property obligations affecting sectors such as agriculture (seeds), pharmaceuticals, and technology—sectors where US companies earn their most reliable income from Brazil,” it added.