Brazil's Chamber of Foreign Trade (CAMEX) announced in a news release linked to the Ministry of Development, Industry and Foreign Trade that Brazil will reinstate import taxes for certain steel products, which were eliminated back in 2005, and range from 12 to 14 percent.
Brazil withdrew hot rolled coils, cold rolled coils, carbon steel plate and alloy bars from an exemption list linked to the Common External Tariff of Mercosur, a free trade agreement in which Brazil participates along with Argentina, Paraguay and Uruguay. Effective June 5, these products will be subject to a 12 percent import tax, except for alloy bars, which will be subject to a 14 percent duty.
Although CAMEX did not specify the reasons for the decision, the petition to reimpose taxes on steel products was brought forth by local steel companies with the support of labor unions. Brazilian steel companies say they are still only producing at 50 percent capacity and that the local market has been negatively affected by cheaper products imported from China and Korea as well as the recession.