Brazil to provide $3.7 billion in credit for firms hit by US tariffs

Industries affected by the 25% U.S. tariffs will be the main beneficiaries of the credit lines, the government said, citing sectors such as steel, aluminum and footwear.

The financing, pending congressional approval, will help firms seeking things such as working capital, machinery and equipment, investments or new markets, according to the statement.

The move will be the third phase of a program the Brazilian government created last year in response to an initial round of U.S. tariffs. The program provides subsidized credit lines and encourages affected industries to seek new markets.

The U.S. imposed a 25% tariff on its imports of a range of Brazilian products, effective Wednesday, citing what it sees as Brazil's unfair trade practices, from electronic payment services to ethanol market access and illegal deforestation.

The Brazilian government has criticized the tariffs, levied by President Donald Trump under the Trade Act of 1974. Brazil has said the U.S. decision is unjustified since Brazil has a trade deficit with the U.S., and uses false allegations.

Brazil is also part of a separate U.S. investigation into forced labor allegations that ends on July 24. This could add another 12.5% tariff that would push total duties on some goods to 37.5%.

"Regarding the forced labor-related Section 301 investigation, we contend that it should not be cumulative with the Section 301 action from last week," Brazilian Trade Minister Marcio Elias Rosa said.

Rosa said his latest meeting with U.S. Trade Representative Jamieson Greer ended with both sides signaling their intention to continue negotiations. No date has been scheduled for the next round of talks.