Government opens additional credit of R$30 billion for the Sovereign Brazil Plan

The federal government has published a provisional measure (MP) providing an extraordinary credit facility of R$30 billion for the implementation of the Sovereign Brazil Plan, which aims to support companies suffering losses due to the recent measures announced by the United States to impose a 50% tax on Brazilian exports. The MP, signed by President Luiz Inácio Lula da Silva, was published in Tuesday, the 2nd, of the Federal Official Gazette.

The plan was announced by Lula on August 13th , and the resources will be allocated to the Export Guarantee Fund (FGE) for credit at affordable rates. Priority will be given to companies that have no alternative to exporting to the United States, based on their revenue, product type, and company size.

Small and medium-sized companies will also be able to use guarantee funds to receive credit, and access to these lines will be conditional on maintaining the number of jobs.

Additional contributions of 1.5 billion reais will also be made to the Foreign Trade Guarantee Fund (FGCE), 2 billion reais to the Investment Guarantee Fund (FGI), of the National Bank for Economic and Social Development (BNDES), and 1 billion reais to the Operations Guarantee Fund (FGO), of Banco do Brasil, aimed primarily at access by small and medium-sized exporters.

The tariff hike imposed on Brazil is part of the new White House policy, adopted by President Donald Trump, of raising tariffs against trading partners in an attempt to reverse the relative loss of competitiveness of the United States economy to China in recent decades.

On April 2, Trump imposed tariffs on countries based on the size of the US's trade deficit with each nation. Because the US has a trade surplus with Brazil, the lowest tariff, 10%, was imposed at the time.

However, on August 6, the additional 40% tariff against Brazil came into effect in retaliation for decisions that, according to Trump, would harm American big tech companies and in response to the trial of former president Jair Bolsonaro , accused of leading an attempted coup d'état after losing the 2022 elections.

There is a list of exceptions and, of everything that is exported by Brazil to the North American country, 35.6% is subject to a 50% tariff.

Access to resources

Private legal entities that export goods to the United States that have been affected by tariffs and that are registered in official foreign trade systems will be able to access the actions provided for in the Sovereign Brazil Plan.

Individuals who export goods to the United States on a business or professional basis, duly registered as exporters with the competent bodies, in the category of individual companies, individual microentrepreneurs (MEI) and rural producers with a CNPJ (Brazilian Corporate Taxpayer Registry) may also join.

To access the credit and guarantee actions provided, you must be in good standing with the Brazilian Federal Revenue Service (RFB) and the Attorney General's Office of the National Treasury (PGFN) regarding federal taxes and contributions. Those under judicial or extrajudicial recovery, bankruptcy, or liquidation will not be eligible for these measures, unless they demonstrate a judicially approved recovery plan.

Access to the plan's measures will be given priority to companies that recorded, between July 2024 and June 2025, at least 5% of their total revenue coming from exports of products impacted by additional US tariffs.

Companies whose gross revenue from exports of impacted products is equal to or greater than 20% of their total revenue for the same period will be able to access financing under more favorable conditions. In the case of guarantees under the Emergency Credit Access Program (PEAC-FGI Solidário), only companies with annual gross revenue of up to R$300 million in the year prior to contracting (MSMEs) will have access.

In addition to expanding export financing lines, the Sovereign Brazil Plan includes extending the suspension of taxes for exporting companies; increasing the percentage of federal tax refunds through Reintegra; and facilitating the purchase of food products by government agencies.