Brazil’s Automotive Association Calls for Higher Tariffs on Chinese Imports
Brazil’s automotive association, Anfavea, is calling for the reinstatement of a 35-percent tariff on Chinese electric and hybrid vehicle imports to prevent trade imbalances and protect local jobs. The association warns that low tariffs make Brazil vulnerable to foreign competition, particularly from China, and emphasizes the importance of fostering domestic investment to sustain the industry.
The National Association of Automotive Vehicle Manufacturers (Anfavea) in Brazil is advocating for a higher tariff on imports of electric and hybrid vehicles from China. As reported by Istoé Dinheiro, Anfavea seeks to reinstate the 35-percent tariff that was reduced last year due to concerns over a potential trade imbalance, which could adversely impact production, investments, and employment in Brazil’s automotive sector.
Anfavea has expressed concerns that the tariff reductions made last July, which lowered tariffs on electric vehicles (to 18 percent), plug-in hybrids (to 20 percent), and other hybrids (to 25 percent), undermine the local industry. The association emphasizes that Brazil lacks the protective import barriers seen in other major automotive markets, such as the United States and Europe. This situation enables Chinese manufacturers to dominate the Brazilian market.
As the sixth-largest car market globally, Brazil’s current tariff structure is perceived by Anfavea as making the country an “easy target” for foreign imports. The association highlights that even reinstating a 35-percent tariff would still be less than the European Union’s 48-percent tariff on Chinese electric cars and significantly lower than the potential 100 percent tariffs in the U.S. and Canada.
Anfavea warns that the influx of imports threatens Brazil’s recently stabilized auto industry, which has only just begun to recover after enduring a decade-long economic downturn and the effects of the Covid-19 pandemic. The association points out that without a favorable trade balance, the industry, which supports over 1.3 million jobs, faces a serious risk.
Despite concerns regarding Chinese imports, Anfavea appreciates investments from automakers like BYD and Great Wall Motor, asserting that maintaining low tariffs may hinder future investments and job creation in Brazil. The newly established BYD factory, acquired from Ford in 2023 and currently under construction, is expected to create 10,000 jobs, effectively compensating for losses when Ford closed its local factories, which affected approximately 70,000 jobs within the supply chain.
The recent closures of Ford’s plants have exacerbated the challenges facing Brazil’s automotive sector. However, the establishment of BYD’s new energy vehicle production facility in Bahia promises to significantly boost automotive production in the state, with an initial capacity of 150,000 units, ultimately aimed to reach 300,000 units by 2028.
In conclusion, Anfavea advocates for the reinstatement of higher tariffs on Chinese vehicle imports to protect the Brazilian automotive industry from trade imbalances. The association emphasizes the need for robust protective measures to maintain production, investment, and employment in the sector, especially in light of the booming Chinese electric vehicle market. It also highlights the potential for local job creation through investments from companies like BYD, reinforcing the importance of a healthy trade balance for sustainable growth.
Original Source: macaonews.org
