In a significant shift in trade policy, Brazil has implemented a 25% tariff on imported car tyres, a move approved by the Brazilian Foreign Trade Chamber (CAMEX). This represents a considerable increase from the previous import tax rate of 16%, underscoring Brazil's commitment to safeguarding its domestic tyre manufacturing industry.
The tariff increase aligns with Brazil's broader strategy to protect local industries from foreign competition, particularly in light of an influx of tyre imports, mainly from China. This decision was supported by ANIP, the Brazilian tyre industry association, and reflects growing concerns about the challenges facing Brazil's economy and domestic manufacturers.
The new tariff is expected to offer a buffer for Brazil's tyre manufacturers, which have faced increasing pressure from imported tyres. By imposing this higher import duty, Brazil is likely aiming to level the playing field for domestic producers, giving them a competitive edge over lower-cost foreign products.
Brazil has seen a surge in tyre imports, driven by the availability of competitively priced tyres from international markets. This influx has reportedly impacted local businesses, prompting the government to intervene with protective tariffs as a way to curb imports and bolster local demand.
Brazil's economy has faced multiple challenges, with lingering effects from the COVID-19 pandemic. This has put added pressure on the government to support domestic industries. By increasing tariffs on car tyres, the government is taking a step towards stabilising the local market, aiming to ensure that domestic manufacturers can thrive without being undercut by cheaper imports.
The 25% tariff will remain in place for 12 months, during which the government will likely assess its impact on the domestic tyre market and overall economic conditions. This measure is part of a broader trend in Brazil's trade policy, which has historically included adjustments to tariffs and anti-dumping investigations on various products, particularly from China.
This latest tariff increase follows a familiar pattern in Brazil's trade policy, which has frequently employed tariff adjustments to manage imports and foster domestic production. In 2018, Brazil’s average applied tariff rate was 13.4%, and the country has periodically adjusted rates to align with shifting economic priorities and industrial needs.
As Brazil continues to navigate economic pressures and fluctuating global trade dynamics, this policy underscores a broader tendency to protect local industries through strategic tariff interventions.
