Tariffs complicate Brazil in relation to competitors, says Lucas Ferraz
Brazil may face a situation of significant commercial disadvantage in relation to its international competitors after the imposition of new tariffs by the North American government. The assessment is by Lucas Ferraz, former Secretary of Foreign Trade, in an interview with WW.
According to him, the current scenario represents an attempt to restore the tariffs that had been canceled by the American Supreme Court in February.
Ferraz explained that, after the United States Supreme Court took away from Donald Trump the possibility of using a certain tool to freely impose tariffs, it was already anticipated that the trade representative and Section 301 investigations would be used as a way to circumvent the court decision.
"William, I believe so", said Ferraz when asked about the matter. According to him, following the decision, Trump started using another device - Section 1-2-2 - adding 10% tariffs, which expire at the end of July.
Deadline of July 15th and accumulation of taxes
The expert highlighted that the deadline of July 15th coincides with the application of 25% tariffs on Brazilian products, in addition to another investigation related to imports of products made by forced labor, which could add another 12.5% of taxes.
The accumulation of these measures, if implemented as expected, would result in total tariffs of 37.5% affecting a relevant portion of Brazilian exports.
Brazil in an unfavorable position compared to competitors
For Ferraz, the most worrying point is not only the absolute level of tariffs, but Brazil's relative position in comparison to other countries. "Brazil, once again, looks bad compared to its international competitors", he declared.
According to him, if everything goes as expected, up to 30% of Brazilian exports will be affected by tariffs of 37.5%, while the European Union and Asian countries should face lower tariffs. "Brazil will really be in a very complicated situation", concluded the expert.
The texts generated by artificial intelligence on CNN Brasil are made based on video cuts from the newspapers in its programming. All information is investigated and checked by journalists. The final text is also reviewed by the CNN journalism team. Click here to find out more.
Source: CNN