The Brazilian government on Wednesday unveiled the “Sovereign Brazil” program, a large-scale initiative aimed at protecting domestic exporters affected by the 50% import tariff imposed by US President Donald Trump on selected Brazilian products. The package, worth 30 billion reais (approximately $5.5 billion), combines low-interest loans, tax relief, and other measures to cushion the impact of Washington’s trade move.

Just hours after the program’s announcement, US Secretary of State Marco Rubio announced new sanctions against Brazilian officials, which, according to the Associated Press, underscores the growing diplomatic tension between the two countries.

Lula: Turning crisis into opportunity

President Luiz Inácio Lula da Silva presented the initiative as the first legislative step to assist affected exporters, which will be sent to Congress for approval. The meeting in Brasília, attended by lawmakers from across the political spectrum, showcased rare unity – seen by observers as a sign of greater political cohesion in response to US trade pressure.

The plan includes:

  • Deferring certain tax obligations for companies hit by US tariffs,

  • Tax breaks worth 5 billion reais ($930 million) for small and medium-sized businesses until the end of 2026,

  • Expanding insurance coverage for canceled foreign orders,

  • Requiring public institutions to purchase goods that can no longer be shipped to the US,

  • Extending the tax drawback system by one year for imported materials used in the production of export goods.

“We cannot allow ourselves to be paralyzed by a crisis. A crisis is a moment to create new things,” Lula said, calling the US move “unpleasant” and “without legitimate justification.”

Political backdrop of the tariffs

Trump partly tied the tariff decision to the legal case against his political ally, former Brazilian President Jair Bolsonaro, who is currently under house arrest. Lula accused Washington of using human rights rhetoric as a political tool. He stressed that Brazil’s judiciary is independent and judges will not yield to political pressure. Bolsonaro’s trial is expected to take place between September and October.

Justice Alexandre de Moraes, who is presiding over the case, has been targeted by US sanctions under the Magnitsky Act. He stated that all defendants are being afforded due process and pledged to continue his work despite the sanctions.

Rubio targets “Mais Médicos”

Shortly after Lula’s remarks, Rubio also announced visa restrictions for officials from Cuba and other governments linked to what he called a “program of exporting exploitative labor.” He cited Brazil’s “Mais Médicos” (More Doctors) program, launched in 2013, which brought thousands of foreign doctors, including Cubans, to underserved regions of the country.

Rubio called the initiative a “diplomatic fraud”, while the Brazilian government maintains that nearly 25,000 doctors currently work in the program, without specifying the number of Cubans.

Lula avoids immediate retaliation

Despite rising tensions, Lula said he would not activate Brazil’s reciprocity law to raise tariffs on US goods. “We don’t want conflict. We want to negotiate – but with the condition that our sovereignty remains untouchable,” he emphasized.

Finance Minister Fernando Haddad added sharply: “Brazil is being sanctioned for being more democratic than its aggressor.”

The diplomatic dispute shows no signs of cooling. Both nations continue to exchange measures and accusations, while Brazilian exporters wait to see the concrete effects of the new support program.

#brasil , #usa , #TradeWar , #Tariffs , #worldnews

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