• Brazil unveils a $5.5 billion relief plan for exporters affected by U.S. tariffs.
• The plan includes credit, tax credits, and support for small businesses.
• U.S. tariffs on Brazilian goods increased to 50% initiated by Trump.

Brazil's President Luiz Inacio Lula da Silva announced a comprehensive support package known as "Sovereign Brazil," which allocates 30 billion reais ($5.5 billion) to assist local exporters impacted by the U.S. raising tariffs to 50% on several Brazilian products. Lula described this initiative as an essential first step and emphasized its urgency during a ceremony attended by Congressional leaders in Brasilia, signaling political support for his administration amidst growing tensions with the U.S., according to Reuters, India Times, and Al Jazeera.

The plan not only provides significant credit for exporters but also includes various measures to mitigate the impact of U.S. tariffs. These measures comprise delaying tax payments, allocating 5 billion reais ($930 million) in tax credits to small and medium-sized enterprises until the end of 2026, and expanding insurance against canceled orders. Furthermore, the government will encourage public procurement of goods that cannot currently be exported to the U.S., as stated by Lula in his address, according to India Times and Al Jazeera.

In context, the recent escalation of tariffs imposed by the U.S. has been linked to allegations against former Brazilian President Jair Bolsonaro. The Trump administration justified the tariffs as a response to Brazil's judicial actions towards Bolsonaro and his supporters. Lula, however, dismissed the sanctions as unfounded and criticized the rationale behind the tariffs, arguing that they failed to reflect the actual situation in Brazil, according to Reuters and Al Jazeera.