In recent years, Brazil and China have become very close trade partners. The two countries are leading export destinations for each other, and their diplomatic relations have also been extremely strong. However, the two countries have faced a couple of challenges as well. Brazilian manufacturers have started to become worried about the threats posed by Chinese products, while Brazil’s domestic market has also faced shortages of certain products because of excessive exports to China. Thus, Brazil has ultimately decided to suspend import tariffs.
Brazil Suspends Import Tariffs
Brazil is the world’s third-largest producer of corn and the largest producer of soybean. It is considered to be a hub of global commodities, thanks to its access to natural resources and its well-spread agriculture industry. In particular, Brazil’s corn and soybean exports to China have significantly increased in recent months. The demand for Brazilian commodities has remained high in China despite the COVID-19 pandemic. This high demand for Brazilian exports has created a situation where Brazilian producers are struggling to meet the needs of the locals. Thus, in order to rectify this, the Brazilian government has suspended import tariffs on these products, which stood at 8% before the pandemic, to make sure that the challenges of the supply chain can be resolved.
The elimination of import tariffs means that Brazilian producers can import their raw materials from other parts of the world to meet the demand for exports, as well as successfully cater to the local market. The tariffs on corn have been suspended until March 31st, 2021. Similarly, tariffs on rice were also suspended in the past. These policy initiatives are helping the Brazilian government in ensuring that the demands of the local population can be met and are being prioritized.
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