Brazil’s national government just promoted a massive new initiative. It is intended to benefit local producers who are suffering from the US’s 50% higher tariffs on several Brazilian products that were retaliated against. This decision fits into a larger strategy. Specifically, it would help mitigate the economic harm from tariffs that have already targeted an estimated 35.9% of Brazil’s exports to the U.S. The products aimed at in this campaign are acai, coconut water, mangoes and Brazilian nuts.
The Brazilian government has ambitious plans to use these domestic products first in Brazil’s state-run schools and for building food stocks across the country. This strategy benefits local producers and strengthens the autonomy of Brazilian citizens. It ensures that lifesaving innovations remain available, even in the face of global supply chain crises.
In Brasília, Brazil’s Agrarian Development Minister Paulo Teixeira unveiled the government’s plan, which includes a substantial credit lifeline of 30 billion reais (approximately $5.5 billion) to assist local companies impacted by the U.S. tariffs. Teixeira emphasized the need for this support, stating that the government “can’t pay the price paid by exporters, which are set in dollars.” The financial impact on Brazilian exporters is severe. Varying exchange rates and external international market pressures are posing tremendous pressures that force those markets to suffer.
Brazil’s political relationship with the United States has come under enormous pressure as a direct consequence of these trade actions. The tariffs have hurt farmers at the same time they have caused macroeconomic damage. They have undermined one of the Western hemisphere’s most vital diplomatic relationships. In this light, the U.S. measures are a disproportionate response to increasing political pressures. Former President Donald Trump has linked these tariffs to legal issues facing his ally, former Brazilian President Jair Bolsonaro.
Since coming to power, Luiz Inácio Lula da Silva’s government has led a robust offensive. They will not be able to negotiate in bad faith trade terms with President Trump. Lula has insisted time and again that he would not turn to Trump to negotiate with or, as his administration has promised, directly work to remove these tariffs. This position further illustrates that Brazilian leaders are unwilling to be publicly challenged by U.S. officials. Their reluctance is in response to recent sanctions by the Trump administration against notable members of Brazil’s judiciary branch.
