BNDES Launches 10 Billion Real Credit Line for Struggling Businesses
The Brazilian National Development Bank (BNDES) has announced a new 10 billion real (approximately 1.85 billion USD) credit line to support companies impacted by increased US tariffs.
Credit Line Breakdown
The BNDES credit line consists of two segments: one for general operating expenses and another for exploring new markets. This initiative complements a 5.5 billion USD credit line unveiled by the Brazilian government earlier this month.
Eligibility for the Credit Line
Brazilian businesses of all sizes with products subject to any percentage of US tariffs can apply for the BNDES credit line, according to a statement from the bank.
Previous Support Measures
On August 13, the Brazilian government disclosed a package of assistance for companies affected by US tariffs. The focus was on credit lines for exporters and government procurement of products facing greater challenges in finding alternative markets.
- Credit Lines: The government announced credit lines to help exporters maintain competitiveness in the US market.
- Government Procurement: The government committed to purchasing products from industries facing increased tariffs, such as coffee, beef, seafood, textiles, footwear, and fruit.
- Additional Contributions: The government pledged an additional 832 million USD to strengthen support funds for small businesses.
Impact of US Tariff Increase
US President Donald Trump raised tariffs on various Brazilian products from 10% to 50% in August. Although some sectors were exempt from the higher tariffs, the measure will continue to negatively affect industries like coffee, beef, seafood, textiles, footwear, and fruit.
This new support program from Brazil alleviates the tax burden on exporters, enabling them to remain competitive in the US market until the end of 2026. The Brazilian government estimates this measure will forgo 925 million USD in potential revenue.
Key Questions and Answers
- What is the BNDES? The Brazilian National Development Bank (BNDES) is a state-owned development bank that provides financing for public and private projects in Brazil.
- What industries are affected by the US tariffs? Industries such as coffee, beef, seafood, textiles, footwear, and fruit are negatively impacted by the increased tariffs.
- What does the new support program from Brazil entail? The program includes a 10 billion real credit line, government procurement of affected products, and additional contributions to support small businesses.
- How long will the tax relief measure be in effect? The tax relief measure will remain in place until the end of 2026.
