Brazil has mounted probes into allegations of dumping from a fellow BRICS member and largest trade partner.
Brazil’s industry ministry has ordered at least six such investigations over the past six months, the Financial Times reported. These include an investigation into steel, of which the South American country is the ninth-largest producer and China the first.
China’s cratering property market, high youth unemployment, and other uncertainties in the world’s second-largest economy have depressed domestic demand, though this recently ticked upward.
The resulting overproduction of Chinese goods has made overseas markets an attractive solution, and exports took off in the first two months of the year.
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Chinese iron and steel exports to Brazil totaled $2.7 billion last year, up from $1.6 billion in 2014. Brazil’s steel industry players have called for tariffs of 9.6 to 25 percent on steel imports. Stakeholders in Brazilian chemicals sector have also complained.
“Last year saw one of the most critical situations in the entire history of the national chemical industry,” the news agency cited Brazilian chemical industry association President Andre Passos Cordeiro as saying. “We see temporary increases in import tariffs as an indispensable regulatory tool for combating these predatory operations and preserving the domestic market.”
A significant reason why Chinese manufacturers can produce at below-market prices is the amount of subsidies Beijing pours into its industries—estimated in 2019 to be double that handed out by the U.S. government—have put other countries on their guard.
Newsweek reached out to the Chinese Embassy in Brazil and Brazilian Foreign Ministry for comment.
U.S. Treasury officials have threatened to take action if China floods world markets with lower-cost goods.
“The rest of the world is going to respond, and they’re not doing it in a new anti-China way, they’re responding to Chinese policy,” Jay Shambaugh, the department’s under secretary for international affairs, told the Financial Times.
Last fall, the European Union announced it was launching an anti-subsidy investigation into surging European imports of Chinese electric vehicles. EU Commission President Ursula von der Leyen cited the “huge state subsidies” behind the non-competitive prices of the cars.
BRICS is an acronym for the organization’s first four member states: Brazil, Russia, India, China and South Africa. It now also includes Egypt, Ethiopia, Iran and the United Arab Emirates.
Representing a significant portion of the world’s population and the global GDP, the group is seen as a geopolitical counterpart to the G7, promoting alternatives to Western-dominated financial systems.
Uncommon Knowledge
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.
Newsweek is committed to challenging conventional wisdom and finding connections in the search for common ground.