International News 14 August 2025
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Brazil to Provide $5.55 Billion Credit Support for Exporters Hit by U.S. Tariffs
Brazil will allocate 30 billion reais (US$5.55 billion) in credit to support exporters impacted by the recent U.S. tariff hike, President Luiz Inacio Lula da Silva announced Tuesday (Aug 12, 2024). The package, to be detailed on Wednesday in Brasilia, will include low-interest loans and government purchases of domestic products to sustain local demand. The funds are expected to come from the state development bank BNDES, targeting companies directly affected by the tariff increase. The U.S. raised import duties on several Brazilian goods from 10% to 50% earlier this month, though key exports like orange juice and aircraft were exempt. Brazil’s move aims to preserve export competitiveness and maintain market share abroad despite worsening trade ties with Washington, with the credit facility serving as the first step in a broader relief plan.
Trump Extends U.S.–China Tariff Truce for 90 Days
U.S. President Donald Trump signed an executive order on Monday (Aug 11, 2025) extending the tariff truce with China for 90 days, delaying planned import duty hikes until mid-November. The move keeps U.S. tariffs on Chinese goods at 30% and Chinese tariffs on U.S. goods at 10%, giving American retailers breathing room to secure holiday season supplies at lower rates. Without the extension, duties could have soared to 145% for Chinese goods and 125% for U.S. goods, risking a de facto trade embargo. The decision follows earlier de-escalation steps and renews hopes for a potential Xi–Trump meeting this fall to reach a broader trade framework. Analysts say the delay offers both sides time to address long-standing trade disputes, with Trump reportedly seeking additional concessions from Beijing. Former trade officials note the move eases market anxiety and maintains a cooperative atmosphere for negotiations, while U.S. trade data shows the June trade deficit with China shrinking 70% year-on-year to US$9.5 billion — the lowest since February 2004. Washington, however, continues pressuring Beijing over its Russian oil purchases, signaling that broader geopolitical tensions remain in play.
U.S. Budget Deficit Widens Despite Tariff Revenue Surge
The U.S. budget deficit swelled nearly 20% in July 2025 to $291 billion, despite a sharp increase in customs revenue from President Donald Trump’s high import tariffs. Treasury Department data showed that revenue for the month rose 2% year-on-year to $338 billion, driven in part by a jump in net customs receipts to $27.7 billion from $7.1 billion a year earlier. However, spending grew at a faster pace—up 10% to $630 billion—setting a new record for July. Without calendar adjustments for fewer working days, the deficit would have stood at around $271 billion. Analysts noted that while tariffs boosted government coffers, the costs are largely borne by importing companies and often passed on to consumers, with modest price increases in tariff-sensitive goods offset by lower gasoline prices. Over the first ten months of the fiscal year, the U.S. deficit totaled $1.63 trillion, 7% higher than the same period last year. Both revenue ($4.35 trillion) and spending ($5.98 trillion) hit record highs, with rising healthcare costs, Social Security payments, and interest on public debt outpacing tariff gains. Customs duties for the year-to-date reached $135.7 billion—up 116% from last year—but were offset by a $141 billion jump in government healthcare spending and a $108 billion increase in Social Security outlays. Economists warn that a backlog of goods in bonded warehouses could lead to a temporary surge in tariff collections once released, but structural spending pressures continue to drive the deficit higher.