New relief plan offers R$18.5bn to tariff-hit companies
Bruno Moretti
Edilson Rodrigues/Agência Senado
The federal government has announced another round of support for industries affected by the latest U.S. tariff increase, offering up to R$18.5 billion in subsidized credit for working capital and investment.
President Luiz Inácio Lula da Silva signed a provisional presidential decree creating Brazil Sovereign 3 on Wednesday (22), during a ceremony at the Planalto presidential palace.
The package includes R$13.5 billion in funds from the National Treasury and R$5 billion from the Brazilian Development Bank (BNDES), as previously reported by Valor.
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The Treasury portion will come from unused funds allocated to the first phase of the Brazil Sovereign program and from resources linked to the renegotiation of rural debt. The money will be transferred to BNDES, which will operate the new credit program.
The provisional decree will have no effect on the central government’s primary balance because the loans are classified as reimbursable financial expenditures.
Gradual disbursement
Finance Minister Dario Durigan said a government committee will oversee the program and assess when additional credit needs to be released. The panel will also determine how much funding each eligible industry will receive.
“We will not necessarily use the entire R$13.5 billion from the Treasury, which will be supplemented by BNDES. We will provide support as needs arise,” Durigan said.
Brazil Sovereign 3 will divide eligible industries into three groups.
The first will cover sectors directly affected by the 25% additional tariff imposed by the United States. The measure was announced last week and took effect on Wednesday (22) for some Brazilian products exported to the U.S. market.
The latest phase of the program extends beyond the new tariff increase. It will also benefit industries considered strategic to Brazil’s trade balance and companies affected by conflicts in the Middle East.
Strategic sectors will be included in the second group and will encompass industries such as critical minerals and fertilizers. The third group will cover companies that export to countries in the Persian Gulf.
Below-market rates
Interest rates on the credit lines will range from 3% to 9.8% a year. Because the rates are below market levels, the program will involve an implicit government subsidy.
Companies in the first and third groups will have access to all available credit lines. Those in the second group will be allowed to borrow only for investment and purchases of capital goods.
The financing may be used for working capital, capital goods, productive investment, technological innovation, product and process adjustments and efforts to enter new markets.
Planning and Budget Minister Bruno Moretti said each credit line will still require specific regulations defining eligibility criteria and any conditions companies must meet. Those terms will be negotiated with the industries involved.
“We need to move forward in the dialogue with companies and industries to ensure that the conditions are fair,” Moretti said.
The government has not yet decided whether companies will be required to preserve jobs, as they were under earlier phases of the program. Businesses have asked the administration not to retain that requirement.
Access rules
A presidential decree will establish the detailed regulations for the measure. Once the rules are issued, BNDES will open the credit lines and begin accepting financing applications from companies.
Moretti said the regulations are expected to be published in the “very near term.”
Development, Industry, Trade and Services Minister Márcio Elias Rosa said as many as 1,400 companies could qualify for the financing because they have been affected by the latest tariff increase.
The precise number of businesses that will seek credit cannot yet be estimated, since demand will depend on the needs of each company.
Rosa said Brazil Sovereign 3 will provide enough resources to assist businesses affected by the new U.S. tariffs, including the potential impact of an additional 12.5% duty.
That further tariff could be imposed as part of an investigation into imports of goods allegedly produced using labor conditions analogous to slavery. An announcement is expected on Friday (24).
Business consultations
The government has held a series of meetings with business sectors in recent days to hear their demands.
Minister Rosa said executives had stressed the need for measures to be implemented quickly. President Lula, in turn, instructed the government to act “in a timely manner” to address their concerns.
Brazil Sovereign program was first launched in 2025 in response to the initial tariffs imposed by U.S. President Donald Trump on imports of Brazilian products.
The first phase made R$16 billion available and resulted in 1,114 financing operations, although a large share of the funds was not used.
The second phase, announced this year, has a budget of R$21 billion. Applications totaling R$19.5 billion have already been submitted.
