Brazil cuts import tariffs to zero on 191 capital and IT goods

Brazil’s Foreign Trade Chamber, or Camex, decided on Thursday (March 26) to cut import tariffs to zero for four months on about 200 capital goods, machinery and equipment used in production, and information technology products whose import tax had been raised in February.

The measure aims to reduce costs for industry and ensure supply of items for which there is no equivalent domestic production.

At Thursday’s meeting, Camex cut the tariff rate to zero on 970 products. According to the Ministry of Development, Industry, Trade and Services, 779 of those already had prior exemptions, which were renewed in what the ministry described as a routine decision.

The remaining 191 items are part of a reversal of tariffs raised earlier this year on more than 1,200 electronic products, including smartphones, IT items and electronic components. In February, the government had already eliminated the tariff on 105 of those goods.

Technical criteria

According to the ministry, the reduction was granted after requests from companies claiming there was no domestic production or insufficient supply in the local market. The requests are reviewed by the government, which has up to four months to issue a final decision.

The period for new requests remains open until March 30, allowing further revisions to the list of products covered.

Other sectors

Camex also cut import tariffs to zero on a number of products from other sectors considered strategic. These include medicines used to treat diseases such as diabetes, Alzheimer’s, Parkinson’s and schizophrenia.

Agricultural inputs such as fungicides and insecticides were also included, as well as items used in the textile industry, hospital nutrition and even hops for beer production.

Economic impact

According to the government, the initiative aims to reduce production costs, ease inflationary pressures and prevent supply bottlenecks, especially in sectors dependent on imported inputs.

At the same time, the measure rebalances earlier decisions to raise tariffs, which had been adopted as a way to encourage domestic production but ended up prompting calls for review from industry.

Antidumping

Camex also decided to impose definitive antidumping duties for five years on ethanolamines, a compound used in cosmetics such as hair dyes and straightening products, from China, as well as on polyethylene resins, a type of plastic, produced in the United States and Canada.

A practice regulated by the World Trade Organization, antidumping duties are imposed when a country is able to show that products are being imported at prices below production cost, harming domestic industry.

In the case of polyethylene, Camex decided, despite making the antidumping measure definitive, to keep the surcharge at the provisional levels that had been in force over the past six months.

According to the ministry, that level does not create an additional impact for downstream stages of the production chain, which serves the public interest because the product is widely used in the manufacture of packaging, toys and industrial goods.

Source: report by Wellton Máximo for Agência Brasil

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