Brazil’s Lula scraps tax on imports under $50 before election

Brazil’s President Luiz Inacio Lula da Silva on Tuesday (12) signed an executive order to eliminate federal taxes ​on foreign purchases worth up to $50, reversing course on a highly ‌unpopular levy as he gears up to seek re-election in October.

The move is expected to lower the cost of goods bought on cross-border e-commerce platforms widely used by lower-income ​Brazilians.

“This will benefit the poorer, lower-income population that relies heavily on these (e-commerce) ​platforms to buy products that are very important for their daily ⁠lives,” said the executive secretary of the Finance Ministry, Rogerio Ceron.

Ceron did ​not specify the size of the tax revenue loss from the move, which ​the government said would be published on the official gazette later on Tuesday.

The measures build on a string of recent initiatives by Lula, including a government-backed consumer debt renegotiation program , as ​he looks to shore up support with voters. Opinion polls show him tied ​in a runoff against his main rival, Senator Flavio Bolsonaro, the son of former President ‌Jair ⁠Bolsonaro, whom Lula narrowly defeated in 2022.

The announcement was made during a hastily arranged live broadcast attended by Lula and several officials, including Vice President Geraldo Alckmin, who had previously said that the tax helped boost the competitiveness of ​Brazilian industry and create ​jobs in the ⁠country.

The textile industry has emerged as a leading proponent of tariffs aimed at curbing the influx of Chinese goods. The following chart tracks the volume of apparel imports from China over the last three years:

Apparel Imports from China | Jan 2023 – Mar 2026 | TEUs

Source: DataLiner (click here to request a demo)

When it introduced the measure, the government argued that foreign platforms such as Alibaba Group’s AliExpress, Sea Ltd-owned Shopee ​and Shein were selling products without facing the same tax ​burden as ⁠companies operating in Latin America’s largest economy, creating what it described as unfair competition.

The reversal came on the same day the government also backtracked on a rule tightening access ⁠to ​subsidized public loans for producers with deforested land – ​a measure that had taken effect last month and faced strong opposition from the powerful farm sector.

Source: Reuters

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