U.S. Tariffs Slash $5 Billion from Brazilian Exports, Trigger $30B Aid Plan

The United States imposed unprecedented 50% tariffs on nearly half of Brazil’s exports, significantly impacting Brazil’s industrial sector by reducing export revenue by over five billion dollars and lowering industrial growth forecasts from 2% to 1.7% for 2025. The tariffs primarily affect key sectors such as coffee, beef, machinery, and textiles, making Brazilian products less competitive in the critical U.S. market. In response, Brazil has prepared the “Brazil Sovereign Plan,” a R$30 billion (about $5.5 billion) credit package designed to support affected companies through working capital, investment diversification, and priority aid for smaller firms, pending final government approval. Politically, these tariffs have backfired on the U.S. by boosting President Lula’s approval ratings and accelerating Brazil’s strategic pivot toward China and the BRICS alliance, with China strongly supporting Brazil against U.S. pressure. The U.S. justifies the tariffs on national security grounds linked to Brazil’s domestic political developments, leading to WTO consultations between the two nations. However, Brazilian industry groups warn the tariffs will have lasting negative effects beyond trade figures, including employment and investment declines, and contend that compensatory government measures cannot fully offset the loss of the U.S. market.