Record Chinese Imports Trigger Government Alert

The influx of Chinese products into Brazil hit a record high in the first five months of this year, prompting the government to raise a red flag and renew trade defense measures.

Brazilian authorities have grown increasingly concerned about a potential redirection of Chinese exports toward Brazil amid escalating trade tensions between Beijing and Washington.

Vice President and Minister of Development, Industry, Trade and Services Geraldo Alckmin stated that the government is “closely scrutinizing” imports.

“The industry must stay alert to prevent this movement from flooding Brazil with goods. We are closely monitoring imports. This is not protectionism—it is legitimate protection,” Alckmin said during an event organized by the industrial sector at the end of May.

From January to May, Brazil imported $29.5 billion worth of Chinese products, up from $23.3 billion in the same period of 2024—a 26% increase.

Meanwhile, Brazilian exports to China declined by approximately 10% over the same period.

It’s worth noting that in February, Brazil imported a $2.6 billion oil platform from China. This one-time purchase had a significant impact on the trade balance between the two countries.

Due to that specific transaction, Brazil registered a rare trade deficit of $300 million that month.

Among imported products exceeding $500 million in the first five months, the largest increases were in chemical inputs and fertilizers, which doubled in volume. Also noteworthy were imports of organo-inorganic compounds and heterocyclic compounds, which are used in the production of pharmaceuticals, agricultural pesticides, and industrial additives.

However, these items are not the federal government’s primary concern. The monitoring focus is primarily on imports of Chinese steel and electric vehicles—precisely the areas in which Brazilian industry has demanded stronger protection.

For over a year, Anfavea (the National Association of Motor Vehicle Manufacturers) has been urging the Ministry of Development, Industry, Trade, and Services (MDIC) to bring forward the tariff hike on electric vehicle imports. The current 18% rate is scheduled to rise to 35% by July 2026.

On the other hand, China has been lobbying for lower tariffs. So far, the government has not responded to either side’s requests.

Steel imports, a longstanding concern for Brazilian manufacturers, have become even more sensitive since former U.S. President Donald Trump imposed tariffs on imported steel.

That move heightened fears that China would seek new markets—like Brazil—to offload its production surplus. The steel industry, however, is now receiving a response from the Brazilian government.

In early June, the MDIC’s Department of Trade Defense (Decom) launched an investigation into the export of 25 groups of steel products (classified under NCM codes) from China. This is the largest investigation in Decom’s history in terms of the number of NCMs involved.

The probe, aimed at identifying possible dumping (when a country exports goods at prices below domestic levels), was officially announced in the Federal Gazette on Monday (June 2).

Additionally, at the end of May, the Foreign Trade Chamber (Camex), linked to the MDIC, renewed a 25% import tariff on 19 types of steel and extended it to four additional NCM codes. As a result, 23 products will now be subject to taxation, with the measure in place for the next 12 months.

How Does the Influx of Chinese Steel Affect Domestic Industry?

In practical terms, a surge of Chinese steel entering Brazil—often priced below local market rates—makes imported products cheaper than domestic ones. This is what the industry refers to as dumping.

As a result, Brazilian companies lose competitiveness: they struggle to sell, cut production, lay off workers, and, in extreme cases, shut down factories.

For instance, if a Brazilian steel mill sells steel at R$6,500 per ton, but a similar-quality Chinese product arrives at R$5,500, automakers, appliance manufacturers, and the construction industry are likely to choose the cheaper option.

That’s precisely why the government imposes import tariffs—as a protective measure for national industry, seeking to level the competitive playing field.

Source: CNN Brasil

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