Purchases from abroad gained importance last year with an increase in imports from China
04/24/2024
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In recent months, Brazil’s steel imports, especially from China, have surged, highlighting a conflict between two significant sectors of the national industry — Foto: Divulgação/ArcelorMittal
On Tuesday (23), Brazil’s Chamber of Foreign Trade (CAMEX) approved two measures targeting imports of 11 steel products: the establishment of quotas and a new import tax rate. A 25% tax rate will be applied only to quantities exceeding the average import volume of these products by 30% from 2020 to 2022. This update was announced by the Ministry of Development, Industry, Trade and Services (MDIC) following a meeting of the Executive Management Committee (GECEX) of CAMEX. Prior to this decision, the import tax rates were 10.8% or 12.6%, varying by product.
The ministry indicated that these changes are expected to take effect in about 30 days, pending review by other Mercosur countries. According to an MDIC statement, “the process also involves adjustments with the Federal Revenue Service and the publication of an ordinance to regulate the quotas.”
If approved, the measure will be in place for 12 months. Moreover, the CAMEX is still evaluating the status of four additional steel products, which may eventually receive similar treatment.
In recent months, Brazil’s steel imports, especially from China, have surged, highlighting a conflict between two significant sectors of the national industry. Brazilian producers argue that these imports are detrimental to their business, while manufacturers in the automotive, machinery, electronics, and equipment sectors contend that higher import taxes would increase the prices of their products.
Government sources have recently noted that there has been “very high” pressure from both sides to address their concerns. Similar issues have affected economies in other countries, including the U.S., due to rising Chinese steel exports.
Last year, Brazil imported steel products worth $1.6 billion, which are now subject to quotas, with China accounting for 83% of those sales.
In September, the CAMEX had increased the tax on 12 foreign steel products by 10%, reversing a cut made in 2022. At that time, the MDIC justified the increase as a “response to the concerns of the domestic steel industry, given the substantial rise in imports at prices often subject to unfair practices in recent years.”
At a press conference following the CAMEX’s recent decision, Vice-President and Minister of Development, Industry, Trade, and Services Geraldo Alckmin expressed the government’s expectation that “a large part” of the imports of the 11 products would fall “within the quota.” He supported the changes approved by the CAMEX, noting that steel companies had initially requested a rate increase for 31 products, an even more significant number. “Some industries [steel mills] are operating with more than 40% idle capacity,” he remarked.
*Por Estevão Taiar — Brasília
Source: Valor International