Brazil, a member of BRICS and a key trading partner of China, has initiated investigations into alleged dumping practices by Chinese imports, Newsweek reports.
Reports indicate that Brazil’s industry ministry has launched at least six such investigations within the past six months, particularly focusing on steel products. This move comes as China’s domestic economy faces challenges, such as a declining property market and high youth unemployment, prompting an increase in exports to overseas markets, including Brazil.
Chinese exports of iron and steel to Brazil have surged, reaching $2.7 billion last year, up from $1.6 billion in 2014. In response, Brazilian stakeholders in the steel and chemicals sectors have voiced concerns, with calls for tariffs ranging from 9.6 to 25 percent on imported steel. The Brazilian chemical industry association has emphasised the need for temporary tariff increases to safeguard the domestic market from what they perceive as predatory trade practices.
One significant factor contributing to China’s ability to offer goods at below-market prices is the substantial subsidies provided by Beijing to its industries, which surpass those offered by the U.S. government. This disparity has raised alarms among other countries, prompting discussions about potential retaliatory measures. U.S. Treasury officials have warned of action if China continues to flood global markets with lower-cost goods.
The issue extends beyond Brazil, with the European Union launching an anti-subsidy investigation into increasing imports of Chinese electric vehicles, citing significant state subsidies. These developments underscore broader concerns about unfair trade practices and the role of state intervention in global markets.
