Brazil to present Lula with credit-based response to US tariff hike, finance minister says

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BRASILIA (Reuters) -Brazilian Finance Minister Fernando Haddad said on Thursday a contingency plan in response to higher U.S. tariffs will be presented to President Luiz Inacio Lula da Silva from Monday and will include a menu of measures, including credit lines.

In an interview with local radio station Itatiaia, Haddad said as many as 10,000 Brazilian companies could be affected by the increase in levies on Brazilian goods to 50% from 10%, set to take effect on August 1.

The minister stressed that Brazil remains open to dialogue but suggested that U.S. President Donald Trump is unwilling to engage in negotiations. He said political forces aligned with former Brazilian President Jair Bolsonaro are working to prevent talks from being initiated.

A far-right ally of Trump, Bolsonaro is accused of plotting a coup to overturn his narrow 2022 election loss to Lula.

Trump has denounced the case as a “witch hunt” and urged Brazil’s judiciary to drop the charges, including in a letter announcing the steeper tariffs on Brazil.

Congressman Eduardo Bolsonaro, the former president’s son, is living in the U.S. and has made social media posts about his meetings with Trump allies.

Without naming the younger Bolsonaro, Haddad said he believes those ties, along with opposition to Brazil’s widely used instant payment system Pix, were factors behind the U.S. decision.

Earlier on Thursday, Lula said at a public event that the U.S. government was “afraid” of Pix because it threatens credit cards. The system was listed among unfair trade practices in a recent U.S. investigation.

Haddad said Pix undermines those profiting from financial intermediation and represents a valuable homegrown Brazilian technology.

(Reporting by Marcela Ayres; Editing by David Gregorio)