Lula extends Brazil drawback tax relief for exporters hit by U.S. tariffs

President Luiz Inácio Lula da Silva has issued Provisional Measure 1,386, extending for up to one year the suspension of taxes under Brazil’s special customs drawback regime for exporters affected by the latest U.S. tariff hike.

The measure was published in Brazil’s Official Gazette. It applies to companies using the drawback suspension regime, a mechanism that allows exporters to suspend taxes on inputs used to manufacture goods destined for foreign markets.

To qualify for the extension, companies must prove that their ability to meet export commitments was affected by additional U.S. tariffs applied to Brazilian exports and differentiated by country of origin. The measure also requires that the original drawback deadlines have already been extended by the competent authority.

The extension applies to tax suspensions whose final deadlines fall between July 22, 2026, and December 31, 2026.

The provisional measure also covers tax suspension periods granted to intermediary manufacturers that produce intermediate goods supplied, or already directly supplied, to industrial exporters. In those cases, the final export commitment must also have been demonstrably affected by the additional U.S. tariffs on Brazilian products.

The move expands Brazil drawback tax relief at a time when exporters are seeking more time to adjust sales, contracts and supply chains affected by the new U.S. trade barriers.

Brazil Sovereign Plan and fuel subsidies

Lula also issued Provisional Measure 1,387, opening an extraordinary credit of R$7 billion for the Finance Ministry to support credit lines under the Brazil Sovereign Plan.

The president also issued Provisional Measure 1,388, allocating R$3.152 billion to the Ministry of Mines and Energy for subsidy payments related to fuel production and imports.

The package shows how the federal government is using emergency fiscal and customs instruments to support companies and sectors affected by external shocks, including exporters facing U.S. tariffs.

For Brazilian foreign trade, the extension of Brazil drawback tax relief is intended to prevent companies from being penalized for missing export commitments disrupted by tariff changes outside their control.

Source: Jornal de Brasília , with Estadão Conteúdo

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