BRAZIL · TRADE
Key Facts
- The country Brazil is Latin America’s largest economy and sells steel, machinery and farm goods to the United States.
- What happened On Wednesday 21 October 2026 Brazil’s government opened R$6.49 billion (about US$1.29 billion) in new credit for exporters hit by US tariffs.
- The measure Provisional Measure 1,397, dated 20 October, takes effect at once but needs a later vote in Congress.
- The channel The money goes to the Export Guarantee Fund, run under the Finance Ministry, to finance exporters in the Brasil Soberano plan.
- The US tariffs A 25% US tariff on part of Brazil’s exports applies since July, plus a separate 12.5% surcharge.
- Power Index Brazil ranks 1st of 14 in The Rio Times Latin America Power Index, with 75.0 points (October 2026 edition).
Prediction markets · who wins the runoff
Implied chance of winning Brazil’s presidency on 25 October, from traders’ prices.
Polymarket
Flávio Bolsonaro 78% · Lula 21.5% (US$191 million traded)
Kalshi (regulated in the US by the CFTC)
Flávio Bolsonaro 79% · Lula 22%
As of 21 October, 3:40 pm ET (20:40 Lisbon), updated every 20 minutes. Prices are bets, not polls, and can move fast.
Why we show this: prediction markets turn real-money bets into a live probability that moves within minutes of the news, which is why investors, campaigns and newsrooms in the United States now follow them closely. We show them next to polls and official results, never instead of them.
Brazil has opened R$6.49 billion (about US$1.29 billion) in fresh credit for tariff-hit exporters, the government announced in the Official Gazette on Wednesday 21 October. The money tops up Brasil Soberano, Brasília’s main shield for companies hit by Washington’s 25% tariff.
For US readers, the move shows Brasília is still cushioning its exporters with public credit while it negotiates with Washington. It lands three weeks after the two governments agreed on 30 September to set up a joint working group on tariffs.
Brazil Election Data Room
Runoff poll average: Flávio Bolsonaro 51.1%, Lula 48.9%
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What the Provisional Measure Does
President Lula signed Provisional Measure 1,397 on 20 October, a decree that takes effect at once but needs Congress to approve it later. Published on 21 October, it opens an extraordinary budget credit of R$6,494,296,446 (about US$1.29 billion) for tariff-hit exporters.
The money is assigned to the Export Guarantee Fund, known as FGE, which sits under the Ministry of Finance. It pays for financing to exporters of goods and services, and to their suppliers, who belong to the Brasil Soberano plan.
What Brasil Soberano Is
Brasil Soberano, or Sovereign Brazil, is the government’s package of support for tariff-hit exporters, their suppliers and workers. Its credit lines cover working capital, new machinery, more production capacity, innovation, and changes to products and processes.
In June the government cut the minimum share of revenue that must come from exports from 5% to 1%, so more companies can apply. Steel, copper, aluminium, cars and furniture are among the sectors named for the group hit by US tariffs.
How the US Tariffs Reached Brazil
In July Washington announced an extra 25% tariff on certain Brazilian goods under Section 301, a US trade law on unfair practices. The US Trade Representative, the White House trade office, pointed to Brazil’s Pix instant-payment system and its market for US ethanol.
Brazil also faces a separate 12.5% surcharge that Washington applied to 59 countries and the European Union over forced-labour enforcement. Brazil’s government calls the 25% tariff politically motivated and says the US reasons do not match reality.
Talks resumed on 31 August after a phone call between Lula and President Donald Trump on 21 August. On 30 September foreign minister Mauro Vieira and trade minister Márcio Elias Rosa met US Trade Representative Jamieson Greer in Milwaukee.
A Third Top-Up Since April
This is not the first top-up, because a provisional measure on 29 April added R$5 billion (about US$995 million) to the FGE. Another on 25 August added R$7 billion (about US$1.39 billion), as our earlier coverage reported.
The state development bank BNDES opened a third round of Brasil Soberano loans on 17 September worth R$22.6 billion (about US$4.50 billion). The Treasury supplies R$13.5 billion (about US$2.69 billion) of it, and the bank adds R$9.1 billion (about US$1.81 billion), as our September report explains.
What It Means for US Readers
For US companies, the credit gives Brazilian rivals and suppliers financing to keep selling into the American market despite the 25% tariff. For American importers of Brazilian steel, aluminium and other covered goods, it helps tariff-hit exporters stay in business while the dispute lasts.
For investors in Brazilian assets, the measure shows the plan is still being funded months after the tariffs took effect. Brazil has so far answered with loans, not counter-tariffs, as our July report described, and this measure imposes no duties on US products.
What Is Not Known
The decree does not say how the R$6.49 billion (about US$1.29 billion) will be shared among sectors or how many loans it will back. It is also not yet known whether Congress will approve the measure unchanged.
The US was due to send a document defining the scope of the trade talks in the weeks after 30 September. It is not known whether that proposal has arrived or when the next round of talks will take place.
More: Brazil news in English, every day from The Rio Times.
Frequently Asked Questions
How much money did Brazil release for exporters on 21 October?
Brazil opened R$6,494,296,446 (about US$1.29 billion) in extraordinary credit through Provisional Measure 1,397. The money goes to the Export Guarantee Fund to finance tariff-hit exporters in the Brasil Soberano plan.
What is the Brasil Soberano plan?
It is Brazil’s package of credit and other support for companies, exporters and workers hit by US tariffs. The loans cover working capital, machinery, production capacity and innovation.
Which US tariffs is Brazil responding to?
A 25% US tariff on certain Brazilian goods, announced in July under Section 301, is the main one. A separate 12.5% surcharge on 59 countries and the European Union also applies to Brazil.
Is Brazil retaliating against US goods?
This measure is not retaliation, because it only opens credit for Brazilian exporters and imposes no duties on US products. The two governments agreed on 30 September to set up a working group to discuss tariffs.
Does Congress have to approve the measure?
Yes, a provisional measure takes effect on publication, as this one does, but Congress must vote on it for it to stay in force. Congress has a fixed period to vote, and the measure lapses if lawmakers let it expire.
Sources: Presidency of Brazil, Provisional Measure 1,397 of 20 October 2026 (full text), 21 October 2026; Agência Brasil, Governo destina bilhões a setor de exportação (MP 1.397), 21 October 2026; Agência Brasil, Brasil e EUA criam grupo específico para negociar tarifaço, 30 September 2026; Agência Brasil, Brasil e EUA retomam negociação após tarifaços de 25% e 12,5%, 31 August 2026; Agência Brasil, Plano Brasil Soberano adota novas regras e mais empresas podem aderir, 8 June 2026; Agência Senado, Medida provisória abre crédito para apoiar exportações (MP 1.352), 29 April 2026; Movimento Econômico, BNDES abre pedidos em crédito do Brasil Soberano, 17 September 2026.
Editorial responsibility: Matthias Camenzind, Editor-in-Chief · Editorial standards · Report an error
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