The rate applied in Asian countries should open the market for Brazil, says the foreign trade specialist Jackson Campos
Announced in early April, Donald Trump’s rate should have an impact on the whole world bringing heavier consequences to the sectors that depend on bilateral trade and the automotive enters this segment. For Brazil, however, only 10% of the rates should be an advantage over Asian countries.
According to Sindipeças, the United States were the second largest destination of Brazilian pieces, with 1.4 billion US dollars on board (17.5% of the exports of car parts) and, in the medium term, these rates should make the Brazilian product more competitive in the US market, such as countries, such as China, have received even higher rates. For the foreign trade expert Jackson Campos, this is an opportunity to explore the US market and get even more space.
“As far as our pieces will be added, the amount that will be added is still much lower than the one that will happen to the products manufactured in the European Union and in China, for example. We must exploit this difference in costs and open our market even more, because the quality we must save and we can obtain a very significant American slice for our sector”, says Campos.
On the other hand, in the medium term, this loss of competitiveness can lead to a reduced export, negatively influencing revenues, increasing production hypothesis and possibly influencing the level of work in the Brazilian automotive sector. The industries and the production chain should adapt quickly, looking for new international markets, repositioning products or renegotiating prices with commercial partners in the United States.
Furthermore, Brazil will warn indirect effects of US measurements, since the increase in rates for the suppliers of items for the parties, the price of the finished product will be higher and will be even more expensive for Brazilian importers, which can cause price inflation within the Brazilian market.
“The trend is the pursuit of parts and products that come from there, which will have a direct impact on our internal market. The items that we bring from there, as engines, transmissions and others should arrive at a higher price and directly damage the sector. It is interesting that Brazil explores the other options on the market, looking for other options, looking for the automotive market. The expert.
Brazilian companies with production in the United States should also be affected as they will have to incorporate additional costs by importing Brazilian inputs, which increases the final cost of their locally manufactured products. This can lead to the loss of competitiveness towards local companies that count from other origins with smaller rates.
Companies with only US distribution centers will have to face indirect and milder impacts. Their main challenge will be to face a possible increase in the prices of imported Brazilian products and could lose the market compared to local suppliers or other countries. They could also consider the search for supply alternatives to maintain their competitiveness.
However, who should also pay the account are the final consumers, who will have an even higher cost when they have to replace the parties on their vehicles. “This taxation should be transmitted directly to the final consumer, who will find even more expensive products and will opt for lower quality items to keep maintenance updated. We hope that Itamarate can negotiate this rate thinking about how it can have an impact on people”, concludes Campos.
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Source: Terra
Rose James is a Gossipify movie and series reviewer known for her in-depth analysis and unique perspective on the latest releases. With a background in film studies, she provides engaging and informative reviews, and keeps readers up to date with industry trends and emerging talents.
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