Tariff: Private sector sees possible extension of exemptions after hearing

After discussing the United States' trade investigation against Brazil with North American authorities, interlocutors from the private sector believe in the possibility that the list of items exempt from a possible new tariff will be expanded.

What industry spokespersons interviewed by CNN Money point out is that, considering the debate and technical arguments raised, there is a possibility that products will be excluded from taxation and the correction of some regimes will be considered.

This is because the discussions on that second day focused on the impact that the tariff could have on the USA.

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Increased costs, impact on the production chain, competition with North American products and alternative supply sources from other countries were some of the topics of interest to US authorities and interlocutors interviewed.

When asked about the possibility of his products being replaced, Fabio Cruz, vice-president of Centrorochas (Brazilian Association of Natural Rocks), was emphatic in his response to the USTR (Office of the United States Trade Representative).

"It exists in other places in the world, but not with the geodiversity, aesthetics and reliability that Brazil provides to the United States", said Cruz.

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According to Centrorochas, Brazil is the main supplier of natural rock to the USA, with production being semi-finished products, such as sheets that are used as inputs for the North American industry, which manufactures, cuts and installs products for homes and commercial projects from that raw material.

"It is an extremely integrated chain with the United States", highlighted Cruz.

In the case of Homero Busnello, director of Institutional Relations at Tecumseh, the executive sought to highlight the intercompany relationship of his company, whose headquarters are in the USA.

"We are being taxed when exporting to the headquarters that carries out the industrialization complement and sells at the final end, [...] it is a tariff within the group itself, harming the company that employs and works in the United States", Busnello reported to the report.

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Interlocutors also report that, although the majority of audience participants defended Brazil against the tariff, there were local producers in favor of applying the tariff.

However, Busnello said that, when asked about the ability to meet North American demand if Brazilian supply were interrupted, those against Brazil diverted the answer.

For the director of Tecumseh, the impression left is positive, but, like the other interlocutors, he recognizes that this does not mean that all sectors will be covered by a tariff reduction.

Due to the technical dynamics of the debate, they believe that some cases can be reevaluated. But the final decision is difficult to change, as it passes through the White House and depends on negotiations with the Luiz Inácio Lula da Silva (PT) government and the pen of the President of the United States, Donald Trump.

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Source: CNN