Government authorities in Brazil have confirmed that they are evaluating a potential steel import tax increase, the first response since the Brazilian steel industry, represented by the sector institute IABR, asked for an increase from 12 to 25 percent.
Marcio Elias Rosa, executive secretary of the ministry of development, industry, trade and services, MDIC, said that the ministry is evaluating the request, adding that the government is receptive to the concerns of the steel industry, but the tax increase could negatively impact other sectors, ultimately resulting in a higher inflation rate, due to the possibility of having higher steel prices in the domestic market.
Rosa added that all variables are under analysis, but there is no deadline established for a final decision.
According to analysts, if the higher import tax is approved, the prices of steel products in the domestic market should increase at least by 10 percent, as the domestic prices are framed by the international price of a similar product, after clearing customs, usually added by a premium of 10 percent.