Brazil Slaps Anti-Dumping Tax on Chinese Steel Imports

In a move aimed toward defending domestic industries, Brazil announced on 6 September that it would be imposing antidumping duties on select Chinese steel products, along with tariffs on certain imports from its Mercosur partners. The antidumping levy would be valid for five years, according to officials.

Antidumping duties - meant to target products whose price abroad is less than that in their country of origin - have long been an area of contention between the two BRICS countries.

The anti-dumping duty on Chinese steel tubing, which is commonly used for Brazil's oil and gas industry, will be set at US$743 a ton. In announcing the duty, government officials acknowledged that half of the 81 anti-dumping measures introduced will directly affect Chinese products bought by Brazilian importers.

The decision to apply antidumping duties on Chinese steel tubing came on the same day that Brazil's trade chamber, CAMEX, announced that such duties could be applied retroactively. Duties may be imposed retroactively by 90 days prior to a preliminary ruling on whether the price of the import is indeed less than in its country of origin.

Foreign Trade Secretary Tatiana Prazeres, in an announcement posted on the website of Brazil's trade chamber CAMEX, explained that this latter decision would "close the gap of time in which importers can stock up on goods while we investigate these possible dumping cases."

The revival of the antidumping row between the countries came on the heels of statements from Argentine Foreign Affairs Minister Hector Timerman suggesting that Mercosur-China relations could soon make major strides.

Timerman recently told Chinese media that, while "currently there are no talks on an FTA between China and Mercosur… we are approaching the point where we will have to address the issue as we deepen bilateral ties." Argentina is one of the other major trading powers in Mercosur, the South American customs union; Paraguay and Uruguay are also full members.

Appreciation of real causing difficulties for Brazilian exporters

Along with facing an inflow of cheap imports from abroad, Brazil has also struggled with the appreciation of its currency, the real, in recent years. Bloomberg estimates show that the real has gained 40 percent against the dollar since the end of 2008. The increasing value of the real makes imports cheaper, while making it difficult for Brazilian exporters to compete with their foreign counterparts.

Shortly prior to Brasilia's announcement, Brazil Finance Minister Guido Mantega spoke out over the growing problem with the real. "Part of Brazil's growth is leaking overseas," he told reporters, while urging the US to avoid taking measures that would continue devaluing the dollar at the real's expense.

Brazilian President Dilma Rousseff, in an address on 6 September, promised to keep defending her country's markets. "Let me make clear that my government will not allow attacks on our industry and jobs. We will never allow foreign goods to compete unfairly with our products," she said, according to the Financial Times.

She added that, "in the case of the current international crisis, our principal weapon is to expand and defend our internal market, which is one of the most vigorous in the world."

Brazil will also be imposing higher tariffs on air conditioners, bicycles, and five other products from its Mercosur partners, according to an announcement made on the same day by CAMEX.