Steel and Aluminium

Brazilian government approves early end to reduced import tariffs on 12 steel products

Sep, 20, 2023 Posted by Gabriel Malheiros

Week 202338

The Executive Committee of Brazil’s Foreign Trade Chamber (Camex) approved the withdrawal of 12 steel products from the normative resolution that allowed a 10% reduction in import taxes. The decision will be published in the Official Gazette of the Union and will take effect on October 1, when the import tax rate will return to range between 9.6% to 12.8%.

According to Geraldo Alckmin, the Minister of the Ministry of Industry, Foreign Trade, and Services (MDIC), “this decision reflects our commitment to strengthen the national steel industry. The withdrawal of these 12 steel products from the import tariff reduction will ensure fairer and more competitive conditions for domestic manufacturers.”

This decision was taken in response to concerns from the national steel industry, given the substantial increase in imports at often unfairly low prices in recent years. Several countries have adopted restrictive policies to block such imports, which, in practice, redirect these imports to countries like Brazil.

The measure aims to make Brazilian steel more competitive in the domestic market, helping domestic manufacturers cope with the surge of unfairly priced imports and, thus, maintain a strong local industry.

In practice, the committee increased tariffs for 12 items. The 12 Mercosur Common Nomenclature (NCM) codes that will be taxed the Common External Tariff (CET) are 7208.37.00 (Thick Coils); 7208.38.90 (Hot Coils); 7208.39.10 (Hot Coils); 7208.39.90 (Hot Coils); 7209.16.00 (Cold Coil); 7209.17.00 (Cold Coil); 7210.49.10 (Galvanized Sheets); 7210.61.00 (Aluminum-Zinc Coated Sheets); 7213.91.90 (Wire Rods); 7222.20.00 (Cold Stainless Bar); 7304.19.00 (Seamless Tubes); and 7304.29.39 (Seamless Tubes). The resolution approved last year authorized the import tax rate discount for these products until December 31, 2023.

Márcio Elias Rosa, the Executive Secretary of MDIC, believes that Gecex’s decision makes Brazilian steel more competitive in the domestic market. He stated, “Gecex’s decision is important for the Brazilian steel industry, especially for maintaining jobs generated by the sector in Brazil.”

End of the Import Tax Discount

The national steel sector felt the impact of recent changes in import tax rates from other countries, such as the United States and Mexico. Since 2018, the United States has increased import tariffs on steel and aluminum products. Meanwhile, the Mexican government raised import tariffs to 25% for various products, including iron and steel, until July 2025.

As a result, steel products from countries like China have entered the Brazilian market at prices below the market value, damaging the purchase of domestic items. In the first half of this year, 1.5 million tonnes of these products were imported. Compared to the first half of 2022, the increase in these imports was significant, with up to 714% variations.

Faced with this scenario, the steel industry requested an increase in import taxes for 18 NCM codes. Gecex approved the tariff increase for 12 NCM codes with the greatest potential for economic impact and import volume in the short term.

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