A package of measures designed to mitigate the impact of the 50% tariff imposed by the US on Brazilian goods exported to the US was published on 13 August 2025 (Provisional Measure (PM) No. 1,309/2025). Among the measures in the “Sovereign Brazil Plan” established by the PM are a one-year extension of the duty suspension period under the special drawback regime, granting authority to the Ministry of Finance to postpone the deadlines for payment of federal tax obligations and the establishment of a committee to monitor trade relations with the US. The PM is effective as from the date of publication.
US President Trump issued an executive order (EO) on 30 July 2025 declaring a national emergency relating to developments concerning Brazil and imposing a hefty 40% tariff on many Brazil-origin imports starting on 6 August (subject to exemptions), which apply in addition to US reciprocal tariffs. Another EO released on 31 July includes a 10% country-specific reciprocal tariff rate for Brazil, bringing the total tariffs on Brazil to 50% (for prior coverage, see the trade alert dated 5 August 2025). Additionally, there is a 50% tariff on steel and aluminium. Brazil requested World Trade Organization dispute consultations with the US on 5 August.
Broadly, the measures in the PM establish various support mechanisms for Brazilian exporting entities that are impacted by the tariffs and grant authority to the Minister of Finance to make rules setting conditions and criteria to prioritise the processing of tax credit refunds and defer the payment of federal taxes. The measures include the following:
Edilson Muniz
Queli Morais
BDO in Brazil
Background
US President Trump issued an executive order (EO) on 30 July 2025 declaring a national emergency relating to developments concerning Brazil and imposing a hefty 40% tariff on many Brazil-origin imports starting on 6 August (subject to exemptions), which apply in addition to US reciprocal tariffs. Another EO released on 31 July includes a 10% country-specific reciprocal tariff rate for Brazil, bringing the total tariffs on Brazil to 50% (for prior coverage, see the trade alert dated 5 August 2025). Additionally, there is a 50% tariff on steel and aluminium. Brazil requested World Trade Organization dispute consultations with the US on 5 August.
Summary of the Support Measures
Broadly, the measures in the PM establish various support mechanisms for Brazilian exporting entities that are impacted by the tariffs and grant authority to the Minister of Finance to make rules setting conditions and criteria to prioritise the processing of tax credit refunds and defer the payment of federal taxes. The measures include the following:
- Export credit insurance (SCE): The SCE may incorporate in its premium pricing methodology variables related to the competitiveness of domestic production in international markets.
- Export guarantee fund (FGE): The FGE is established under the Ministry of Finance to provide coverage for guarantees provided by the government in export credit insurance transactions and offer financing to exporting individuals and legal entities. BRL 30 billion are authorised as a funding source for these transactions.
- Extension of tax suspension period under the drawback regime: A customs incentive policy for exports—known as the drawback regime—allows companies to defer or exempt import duties and other federal taxes on inputs used to manufacture products for export. The PM extends the period of time to benefit from the benefits of drawback for an additional year.
- National support for micro and small enterprises: These entities will receive support through expanded guaranteed fund access; guarantees of up to 100% of the value of a transaction will be granted to micro and small enterprises. Beneficiary enterprises can have instalments extended for up to 84 months or suspended for up to 12 months.
- Credit options: New beneficial lines of credit will be granted to affect entities. These focus on working capital; acquisition of capital goods; investments for adapting productive activities; investments aimed at strengthening production chains to expand export capacity; technological innovation; and adaptation of products, services and processes, etc.
- Public procurement of food products: The government has agreed to purchase certain food products that cease to be exported due to the tariffs through direct contracting (public bidding requirements will be waived).
BDO Insight
While the PM is effective immediately, it will expire after 60 days unless it is extended and voted into law. In any case, the new measures represent steps by the Brazilian government to maintain the volume of exports (even to new markets) and absorb part of the production costs. These are short-term measures that will apply until the trade crisis is resolved.Edilson Muniz
Queli Morais
BDO in Brazil