Haddad Says Brazil is Being ‘Sanctioned for Being More Democratic than Its Aggressor’ in Trump’s Massive Tariff Increase

During the announcement of the relief plan for companies affected by the US tariff hike, Finance Minister Fernando Haddad stated that Brazil is being ‘sanctioned for being more ‘democratic’ than the ‘aggressor.’ According to him, it is unprecedented for a country that does not persecute opponents, media, law firms, universities, legal or illegal immigrants to face unjustifiable retaliation from a political and economic standpoint. The relief package includes various instruments to assist affected exporters, from subsidized credit lines to government purchases, following the guidelines of the provisional measure sent to the National Congress.

Haddad revealed that a $30 billion credit line is the primary relief measure for companies proving losses due to the American taxation, especially small and medium-sized businesses. Interest rates will be subsidized, with the condition that beneficiaries preserve jobs. However, exceptions will be made for the most affected companies, requiring additional countermeasures. The government estimates that around 10 thousand jobs will be impacted by the tariff increase.

In addition to credit, Haddad mentioned that insurance is another key element of the relief effort. He emphasized the importance of insurance for maintaining exports, especially for small businesses facing challenges in accessing financial products. The relief package also includes changes to the Export Guarantee Fund to improve access to foreign trade for Brazilian companies, particularly small and medium-sized enterprises.

The Export Guarantee Fund now has released resources to finance sectors affected by the tariff hike at low costs. Additionally, the Reintegra return, which refunds up to 6% of accumulated taxes in the production chain of exporting companies, will be temporary due to the Tax Reform. The relief package extends the Reintegra benefit to medium and large companies, granting a 3% refund on exported value, in addition to micro and small businesses who will have their benefits doubled.

Haddad confirmed that the Reintegra will be crucial until the Tax Reform takes effect in 2027, as it helps exporters face international competition by refunding a portion of the inherent taxes that increase product prices. The relief measures also include extending the deadline for the use of tax credit for exporters who import for production (Drawback) to one year and government purchases.