Following US President Donald Trump’s introduction of a 50% duty on many Brazilian goods, Brazilian President Luiz Inácio Lula da Silva said he would authorise a 30 billion Brazilian reais (5.5 billion US dollars) credit line to support local companies affected by US import tariffs. This is a positive step, according to Abicalçados, but it is not enough to protect the Brazilian footwear industry.

“As a labour-intensive activity that directly employs more than 290,000 people, we need measures to protect jobs. A company that fails to serve its main international market, the US, will not be able to maintain jobs if it incurs more debt, even if the interest rates charged are below market rates”, says Haroldo Ferreira, President of the association. He adds that “if the sector is unable to maintain its exports, it will be difficult to meet the loan commitments”.

The lines announced by the National Bank for Economic and Social Development are intended for Brazilian companies which generate more than 5% of their revenue from exports to the US. For these companies, the minimum interest rate is 0.58% per month. Companies indirectly affected will also be able to access their own financing line at an interest rate of 1.15% per month. To access these lines, companies must also guarantee that they will maintain the jobs created from the fifth month of the loan (on average, up to the sixteenth month).

In light of this scenario, Haroldo Ferreira presented demands for job protection to the Vice-President and Minister of Development, Industry, Trade and Services, Geraldo Alckmin. These include the suspension of employment contracts for up to 90 days, the possibility of extending deadlines for reducing working hours and wages, and suspending contracts by the Executive Branch, as well as the payment of immediate compensatory aid to employees, funded by the federal government and calculated based on the unemployment insurance to which the worker would be entitled, proportional to the reduction in wages or suspension of the employment contract.

According to the World Footwear 2025 Yearbook (more information available HERE), the US was Brazil’s largest export market in 2024, buying 11 million pairs of shoes worth 226 million US dollars.

Image Credits: abicalcados.br.com