Brazil raises tire import tax from 16% to 25%

Brasilia – Brazil’s foreign trade chamber (Camex) has decided to increase the import tax on passenger tires from 16% to 25% for 12 months, while maintaining duties on truck tire imports.

The 18 Sept decision is in response to a petition by local tire makers association (ANIP), which had demanded a temporary increase of ‘common external tariff’ to 35% on car tire imports for a two-year period.

Impacted by low-cost imports from Asia, particularly China, the Brazilian tire industry is threatened by ‘unfair prices’, ANIP said in its petition earlier in August.

The imported tires, it argued, “are entering the country at prices lower than those practiced on the international market, below the production cost and at values even lower than the cost of the raw material used in the products.”

Citing a study carried out by consulting firm LCA, ANIP said the adoption of higher tariffs would protect the national industry and result in an increase of R$20.6 billion (€3.4 billion) in Brazilian industrial production.

The move, it added, will “positively impact” the entire tire production chain, including rubber producers and manufacturers of steel, textile products and chemicals.

“Unfair competition from Asian tires disrupts the production chain, leads to job losses and may cancel investments in the country,” said Klaus Curt Mueller, executive president of ANIP.

Citing the LCA data, the trade association said Asian truck tires entered Brazil at a cost of $2.9/kg, while the product is traded at $4.2/kg on the international market.

In the case of passenger tires, the difference is even more striking: $3.2/kg, compared to $5.7/kg on the global market.

“Without the right barriers, Brazil is left unprotected, which accentuates the process of deindustrialisation,” Mueller added.

According to ANIP, Brazil currently has 11 tire manufacturers operating 21 industrial plants.

The tire industry employs 32,000 direct workers and 500,000 indirect workers.