Laura Gamba
23 July 2026•Update: 23 July 2026
President Luiz Inacio Lula da Silva signed an executive decree on Wednesday opening an 18.5 billion reais ($3.65 billion) emergency credit line to cushion Brazilian companies against a new 25% tariff imposed by the US.
Speaking at the Planalto Palace in Brasilia alongside several Cabinet ministers, Lula framed the stimulus as proof that Latin America’s largest economy can withstand Washington's latest trade penalties.
“We are demonstrating that there is no crisis that can prevent Brazil from continuing its trajectory of economic growth,” he said.
Dubbed “Sovereign Brazil III,” the initiative marks the government’s third major relief package aimed at helping exporters navigate trade disputes with the US. Funding for the measure draws 13.5 billion reais ($2.66 billion) from unallocated Treasury funds reserved during a 2025 credit rollout, with the remaining balance supplied by BNDES, Brazil’s state development bank.
The subsidized loans are available to manufacturers swept up in the latest 25% levy, as well as steel producers affected by earlier US duties.
The new US tariffs stem from an investigation by the Office of the United States Trade Representative (USTR), which concluded that several of Brazil’s commercial and digital policies unfairly burdened US commerce. Official Brazilian estimates suggest the duties will impact about 18% of the country’s exports to the US, though domestic trade groups warn the damage could affect nearly a third of all US-bound shipments.
The levies hit industrial machinery, sugar, ethanol, timber, and footwear hardest. The US government exempted approximately 2,100 product categories, sparing key Brazilian commodities including beef, coffee, crude oil, and commercial aircraft components.
While Lula insisted that Brazil would remain open to diplomatic negotiations with Washington, he signaled that the country would aggressively seek alternative trade partners across Asia, Europe, and the Middle East to absorb redirected exports.
“Even with the US government’s abrupt decision – imposing tariffs without consulting anyone – no one thought the world was going to come crashing down,” he declared. “People are learning to engage and communicate with others who seemed unable to communicate, learning other languages, and becoming familiar with other currencies.”
The diplomatic standoff could worsen in the coming weeks as Brazil remains among dozens of nations subject to a separate US trade investigation into alleged supply chain labor violations, an inquiry that could carry an additional 12.5% tariff.
