27 April 2018
Brazil Mulling Reduction to Duties on Capital Goods
According to press reports, Brazil’s Ministry of Finance has asked the Foreign Trade Chamber (CAMEX) to gradually reduce Brazil’s import duties on capital goods and information technology products in an effort to align them in the coming years with the global duty average for those products. If such a reduction were adopted a range of mainland Chinese capital goods and IT products would face significantly lower duties, benefiting exporters in both Hong Kong and the mainland.
The head of international affairs at the ministry, Marcelo Estevão Filho, reportedly said that Brazilian duties for these products are well above the global average (14 percent vs. four percent) and currently represent an undue restriction for a key sector of the economy. CAMEX head Marcela Santos de Carvalho reportedly favours a more cautious approach that would include an in-depth analysis of the potential impact of these duty reductions on the Brazilian economy. The head of the domestic machinery and equipment manufacturers association, meanwhile, warned that a reduction from 14 percent to four percent would “annihilate” a sector that employs some two million people.