Photo: screengrab from the official website of Brasil 247

By Brasil 247 - President Luiz Inácio Lula da Silva on Wednesday announced the Brazil Sovereign Plan, a sweeping set of measures aimed at protecting the Brazilian economy from the impact of steep tariffs imposed by the US administration. The new import duties, which could reach 50 percent on certain Brazilian products, threaten key industries and tens of thousands of jobs. 

According to the presidential palace, the plan is built around three main pillars: strengthening domestic production, protecting workers, and expanding diplomatic and trade initiatives. The government says the strategy seeks to preserve employment, sustain exports, and attract investment while reducing Brazil's reliance on the US market.

Since July 14, the Interministerial Committee on Economic and Trade Negotiations and Countermeasures, led by Vice President and Minister of Industry, Trade and Services Geraldo Alckmin, has held 39 meetings with roughly 400 representatives from industries including agribusiness, technology, mining, healthcare, footwear, and furniture manufacturing.

Pillar 1 — Strengthening Domestic Production

The package earmarks 30 billion reais (about $6 billion) from the Export Guarantee Fund for low-interest credit lines, prioritizing companies most affected by the tariffs, particularly small and medium-sized enterprises. Access to the loans will be tied to maintaining existing jobs.

Key measures include:

● Extension of drawback deadlines: an extra year for export contracts using imported or domestic inputs with suspended taxes, avoiding fines and interest charges.

● Deferral of federal taxes: a two-month delay in tax payments for the hardest-hit companies.

● Facilitated public procurement: federal, state, and municipal governments will be able to purchase food and goods hit by the tariffs through simplified processes for school lunch programs and hospital supplies.

● Modernized export guarantees: expanding the use of guarantees for medium- and high-tech sectors, with risk-sharing between the government and the private sector.

● Strengthening guarantee funds: an additional 4.5 billion reais to mechanisms such as FGCE, FGI, and FGO to expand credit access for exporters.

Pillar 2 - Worker Protections

A National Employment Monitoring Council will be established to track job levels, propose preservation measures, and oversee labor agreements. Working in conjunction with regional councils under the labor ministry, the body will negotiate emergency arrangements such as temporary layoffs and contract suspensions.

Pillar 3 - Trade Diplomacy and Multilateral Engagement

Externally, Brazil aims to broaden and diversify its export markets to reduce vulnerability to US trade actions. Negotiations with the European Union and the European Free Trade Association have been completed, while talks with the United Arab Emirates and Canada are advancing, alongside exploratory discussions with India and Vietnam.

The government notes that in less than three years, Brazil has opened 397 new export markets, reinforcing its role in global trade. It also maintains a willingness to engage in dialogue with Washington, seeking to restore balanced trade conditions while upholding multilateral principles and an active presence at the World Trade Organization.

（Reported by Brasil 247 on August 13, 2025）