Experts Analyze Impact of Zero-Tariff Policy on Imported Foods in Brazil: ‘Symbolic Effect’

The Brazilian government’s decision to eliminate import taxes on food items such as meat, sugar, corn, and coffee will reach the two-month mark on May 14. The measure aimed to lower the cost of staple foods like meat, coffee, sugar, oil, pasta, and other inflation-affected items.

However, in an almost unanimous assessment, economists interviewed by g1 Piracicaba and surrounding regions consider the policy largely “symbolic.” While it signals the government’s concern over rising prices, they believe it will have minimal or limited impact on the economy and consumers’ pockets.

According to experts, one key reason for the policy’s limited effectiveness is that Brazil is already a major exporter of the products whose import tariffs were lifted, such as coffee.

Between March and April, g1 Piracicaba spoke with economists from four institutions—USP, Unicamp, FGV, and the Federal Institute—about the pros and cons of the zero-tariff policy. Here are their comments and perspectives.

Limited Effect

Renan Pieri, professor of economics at FGV São Paulo, noted that while the tax exemption may have some regional or seasonal effect, its overall impact is modest.

“The effect is very limited, mainly because Brazil already exports most of the products affected by the tariff cuts. So there’s little real impact. We may see food prices rising less—or even falling—in the coming weeks, but this would be more due to a strong harvest than the tax measure itself,” he explained.

He also pointed to specific supply shocks caused by drought or excess rain, which may normalize soon. “Still, the zero-tariff measure will likely have very little effect,” he added.

Symbolic Decision

Antonio Marcio Buainain, a tenured professor at Unicamp and specialist in agricultural economics, agribusiness, and land reform, argued the policy is largely symbolic.

“It’s an important gesture that shows the government is concerned. It sets a boundary: if there’s speculative price movement, imports could provide a check, even if only slight. But it won’t be an effective tool to immediately combat inflation,” he said.

Climate and Harvest Factors

“A wide set of rising prices drives the so-called food inflation. Some, like coffee, stem from two consecutive years of crop failure and exchange rate volatility; others, like eggs, reflect seasonal factors,” he explained.

For example, climate conditions hurt chicken productivity in the case of eggs. Increased egg consumption during Lent and rising corn prices—used in poultry feed—also played a role.

“Brazil is a top exporter of these products. We import some specialty coffees from Colombia or Costa Rica but zeroing out tariffs on those will not affect supermarket prices,” Buainain stressed.

What Measures Would Be More Effective?

Buainain highlighted that other policies, such as incentives for planting the next harvest, improved distribution infrastructure, and identifying chokepoints in key supply chains, may have a greater impact on food prices in the medium term. “Those measures will lead to sustainable food price reductions,” he said.

Carlos Vian, a professor and researcher at the Department of Economics, Management, and Sociology at USP’s School of Agriculture in Piracicaba (Esalq), agrees with the other experts.

“The government wanted to send a message—that it’s concerned about inflation. If well designed, tax relief on food might have a short-term impact, but in this case, even in the short and medium term, the effect will be negligible. The government should focus on other issues,” he suggested.

Emergency Measure

Igor Vasconcelos Nogueira, a management professor at the Federal Institute of São Paulo (IFSP), believes the zero-tariff policy can be an effective short-term tool against inflation, but he also cautioned about potential downsides.

“[…] The potential negative effects—like weakening domestic production and increasing foreign dependence—shouldn’t be underestimated. The government must implement complementary policies that strengthen Brazil’s agricultural sector for long-term supply stability. This emergency measure must be backed by broader, integrated strategies to stabilize food prices,” he stated.

Nogueira listed potential positive and negative effects of the policy:

Positive Aspects

• Increased Food Supply: Lifting import tariffs could boost food availability, which may help lower prices through greater competition with domestic products.
• Relief for Consumers: Lower food prices could ease family budgets, especially for low-income households who spend much of their income on food.
• Competitiveness and Innovation: Competition from imports could drive innovation and efficiency among domestic producers.

Negative Aspects

• Impact on Local Production: Lower-priced imports might hurt domestic producers who can’t compete, potentially leading to reduced output, job losses, and rural migration.
• External Dependence: Greater reliance on food imports could increase vulnerability, especially if exchange rates or global trade conditions shift.
• Fiscal Impact: Forgone import tax revenue could strain government budgets and public service funding.
• Limited Effectiveness: This measure does not address other inflationary pressures, like logistics and transportation costs, which could dilute its impact.

Source: G1

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