The provisional presidential decree (MP) that created the Sovereign Brazil program already goes beyond assisting companies that export to the United States, Mr. Mello explained. In his view, the measures complement the consumption tax reform by giving Brazilian exporters a competitive edge they never had before. Until now, Brazil’s tax and credit structures had not favored export activity, he said.

The MP changes the rules for accessing the Export Guarantee Fund (FGE), previously limited to large companies. It will now be available to micro and small businesses, which are more vulnerable but also generate more jobs. In addition, the privately managed Foreign Trade Guarantee Fund (FGCE) will receive a capital injection to cover possible defaults in export operations. Additional support will come from guarantees offered by the Operations Guarantee Fund (FGO) and the Investment Guarantee Fund (FGI).

“This package is a true game-changer for Brazil’s exporters,” Mr. Mello said. He added that the new structure will remain in place after the effects of the tariffs have passed.

The contributions to the guarantee funds depend on approval of Supplementary Bill 168/2025, which has not yet been assigned a rapporteur. Mr. Mello believes the bill could move quickly once a political agreement is reached. “I think Congress also sees this as a priority,” he said.

Mr. Mello also said there is room for Brazil’s GDP to grow about 2.5% this year. Although the economic slowdown in the second quarter may be slightly sharper than expected, he noted that growth could stabilize—or even turn slightly positive—in the second half of the year. That outlook will depend on the balance between the impact of the tariffs and the effectiveness of the government’s policy response.

Main excerpts from the interview with Valor:

Valor: What are the structural measures that the Sovereign Brazil plan brings to the export sector?

Guilherme Mello: The most structural part is the change in the export credit model. Until now, the FGE was only accessible to a small group of large companies. After the Car Wash investigation, in particular, export financing fell into a sort of limbo, there was even an ideological campaign against it. It was painted as harmful, when in fact the opposite is true. Export financing is a fundamental part of any country’s development strategy. So what we’ve done is approve a tax reform that exempts investments and exports, and now we’re rebuilding, modernizing, and strengthening our export financing system by removing barriers to the use of the FGE.

Valor: What were those barriers?

Mr. Mello: Access to the fund was restricted to large companies. We’ve reallocated R$30 billion to support the diversification and export credit lines we’re offering under the Sovereign Brazil plan. This will increase access to the FGE with cheaper credit lines, because we’re using this financial surplus as funding. We’re also transforming the Foreign Trade Guarantee Fund (FGCE).

Valor: What changes are being made to the FGCE?

Mr. Mello: The FGE is currently a public fund in which 100% of the risk is assumed by the federal government. When a company buys insurance, it pays a premium. If the company defaults, the FGE steps in. Since it’s a public fund, when it pays out to the exporter, it affects the primary budget balance. What we’re doing is turning the FGCE into a first-loss coverage fund. In that setup, the FGE’s capital isn’t touched, it’s protected. Depending on the contract, the FGCE can cover up to 40% of losses, for example. And because the FGCE is private, it can move much more quickly to support small businesses. We’re also enabling the use of other private insurance options through the FGCE. We’re working with CAMEX [Brazil’s Foreign Trade Chamber] to accelerate case reviews, since anti-dumping measures are not allowed under international rules.

Valor: So this is a complete overhaul of the export credit and insurance system?

Mr. Mello: Yes, we’re overhauling the entire insurance model, providing full funding, and eliminating export-related taxes through the tax reform. This package is a true game-changer for Brazil’s exporters.

Valor: Will the changes to the FGCE and FGE go beyond the Sovereign Brazil plan and become permanent?

Mr. Mello: Yes, they are structural. Of course, the funds we allocate to the FGCE under Sovereign Brazil must be used for that plan. But nothing prevents the government from injecting new resources in the future for use in other areas or initiatives.

Valor: So the structure will remain available for future programs?

Mr. Mello: Exactly. And the Sovereign Brazil is designed in an important way. It not only prioritizes support for the most heavily affected companies with lower interest rates, but also provides credit lines to help them diversify markets and adapt their production.

Valor: And what about the companies indirectly affected by the tariffs?

Mr. Mello: In this first phase, we focused on directly affected companies. But we will move forward with a second phase to include companies that are indirectly affected and that are also seeing significant drops in revenue.

Valor: So the second phase will happen for sure, or is it still under evaluation?

Mr. Mello: It will happen. The timeline is under evaluation, as well as the tech development required. For now, our priority is to operationalize the measures already announced. There’s an urgent task of building the technological capability so that BNDES [Brazilian Development Bank] and the banks have the necessary data—such as company tax ID numbers—for those eligible.

We expect this tech development to be ready by September 7 or 8. From that point, the bank will be able to start operating the new credit line. It’s important to stress: the credit lines will operate, but for small and mid-sized businesses to access them, they will need guarantees. Banks won’t issue loans without them to companies that are heavily affected. That’s why we proposed the supplementary bill to allocate funds to the guarantee mechanisms.

Valor: So it’s crucial for Congress to approve the bill soon to avoid small and medium-sized businesses being denied loans?

Mr. Mello: It would be very important for Congress to approve the bill by early September, so that when the credit line goes live, it reaches all affected companies, not just the larger ones.

Valor: And how is the legislative process going?

Mr. Mello: These things can move very quickly once an agreement is reached.

Valor: There’s no rapporteur yet, and no vote is expected this week. Is the delay concerning?

Mr. Mello: I wouldn’t say it’s concerning, but it is a topic already under discussion, and we’ll push to speed things up. I think Congress also sees this as a priority. Obviously, no one wants to leave anyone behind. Failing to support companies—especially small and mid-sized ones that are more financially vulnerable but account for a large share of jobs—would come at too high a cost. We still believe there’s some room for the economy to maintain that 2.5% [growth] pace, but we have to keep a close eye on developments.

Valor: Once the bill is passed, will the government issue a provisional presidential decree for extraordinary credit to inject funds into the guarantee mechanisms? And will the funds be disbursed quickly after that?

Mr. Mello: Very quickly. We may need to make some adjustments to the fund rules, but banks already work with these funds.

Valor: Will additional resources be needed in the second phase, when the plan is extended to suppliers?

Mr. Mello: No. We designed the plan to fit within the resources outlined in the bill: R$4.5 billion in contributions to guarantee funds and up to R$5 billion from Reintegra [a tax refund program for exporters]. Reintegra is also a way for us to support exporters who still operate under a tax regime that generates accumulating credits. When we say “up to” [R$5 billion], it’s based on a preliminary estimate assuming all affected companies would have access. But Reintegra will also follow prioritization criteria, so it’s likely the amount will end up being lower.

Valor: Is this package enough to deliver the structural reforms, or is there more to come beyond the supplier issue?

Mr. Mello: From a structural standpoint, I think it’s enough. It addresses the main bottlenecks: access to the FGE, a second, faster and simpler private fund (FGCE) that covers first losses, and low-cost funding for the process. The combination of export credit reform and tax reform—which removes the burden of taxes on exports—will give Brazil’s export sector a level of competitiveness it has never had.

Agribusiness is a major exporter, but it has distinct advantages that were built over time: through Embrapa, technological development, and investments by the entrepreneurs themselves. But this kind of structured support never existed for industry. Only a few specific industrial sectors have managed to integrate into global export chains. The steps we’re taking now are essential for reversing that trend.

Valor: Will the new Reintegra include prioritization criteria?

Mr. Mello: Yes. We’ll issue regulations outlining how Reintegra will prioritize companies, which will also depend on the bill’s [approval].

Valor: Some industrial sectors are calling for faster anti-dumping measures to prevent a flood of foreign products into Brazil. Do you agree?

Mr. Mello: Some sectors have faced very tough competition that severely hampers their investment plans. We’re working with CAMEX to speed up case assessments, since anti-dumping actions must follow international rules. This is different from what the U.S. is doing with its tariffs, which lack economic or commercial justification and are completely outside internationally established trade rules. Dumping is another matter. We’ve already been in talks with several sectors, and we’re working to speed up all the required procedures for cases where there is clearly an impact on domestic production.

Valor: And what about safeguard measures?

Mr. Mello: Safeguards can also be used if dumping or other unfair practices are confirmed. But again, everything must follow international trade conventions.

Valor: Now turning to the macro outlook. The IPCA-15 inflation index for August showed deflation, and GDP figures will be released next week. What should we expect?

Mr. Mello: When the tariff hike began, some economists said it could be inflationary. I said the impact on inflation would be small, and if any, it would tend to be disinflationary. And I believe that view is proving accurate. A combination of factors explains it: the appreciation of the real, which is stable around R$5.40; the drop in food prices; and the fact that the Brazilian economy is clearly slowing compared to the first quarter as expected.

We’re now seeing that the second-quarter slowdown is a bit sharper than initially forecast, mainly due to the cumulative and lagging effects of monetary policy. We still expect slight growth in the second quarter, and near-stability in the last two quarters of the year.

Valor: What could change this outlook?

Mr. Mello: Many factors, beyond monetary policy, can push activity levels up or down. For example, in July, the federal government paid court-ordered debts [precatórios]. So while interest rates are weighing on the economy, the precatórios may provide some support. Credit is still growing, and now with the new policies we’ve announced, more credit could become available. The final balance of these forces will determine the pace of growth,, whether closer to 2% or 2.5%.

Valor: What’s your bet?

Mr. Mello: We believe there’s still room for the economy to maintain 2.5% growth, but we need to watch closely. Obviously, a 15% interest rate sustained for months has an impact on activity, that’s what it’s designed to do. Based on the metrics we have, the slowdown in the second quarter was more pronounced than expected. But we still see prospects for slight growth or stability in the final quarters, based on the overall balance of factors. And we still don’t know the full net effect of the tariffs.

Valor: And what are the prospects for 2026?

Mr. Mello: Fiscal policy will likely be closer to neutral, while monetary policy should remain tight, though probably less so than this year. The drop in interest rates could give credit a bigger boost, and the set of policies we’ve adopted will encourage companies to take a more export-oriented approach, which requires investment. So we still see potential growth close to our long-term trend in 2026. Of course, this will depend on how the economy performs through the end of this year, the statistical carryover, and how monetary policy evolves.

Valor: Are you concerned that compensation for the income tax reform might not be approved?