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🇧🇷 Brazil /Economy & Trade

Brazilian auto industry urges government to end Chinese automakers' tax benefits

From Folha de S.Paulo · () Portuguese

Translated from Portuguese, summarized and contextualized by DistantNews.

At a glance

News Official statement Context piece
  • - Brazil's automotive industry association, Anfavea, is urging the government not to extend tax benefits for Chinese automakers.
  • Anfavea wants the government to reinstate a 35% import tax on electric and hybrid vehicles starting in July.
  • The association argues that current benefits, including import quotas for parts, disproportionately favor Chinese companies, harming domestic production and employment.

Brazil's automotive industry is pushing back against the extension of tax benefits for Chinese automakers, with the National Association of Motor Vehicle Manufacturers (Anfavea) formally requesting the government uphold its commitment to reinstate import taxes. Anfavea has sent an official letter to President Lula and relevant ministers, demanding the reintroduction of a 35% tax on imported electric and hybrid vehicles, which is scheduled to take effect in July. The association is concerned that Chinese manufacturers, particularly BYD, are seeking to delay this tax implementation. Furthermore, the Chamber of Foreign Trade (Camex) may decide whether to renew import quotas for electric vehicles, which expired in January. These quotas previously allowed Chinese factories to import car parts duty-free and assemble vehicles in Brazil. In response to the ongoing debate, Anfavea is actively lobbying against the renewal of these quotas and the postponement of the 35% tax. These benefits were initially facilitated by former Minister of the Chief of Staff Rui Costa. However, officials within the Ministry of Finance and the Ministry of Development, Industry, Trade, and Services (MDIC) have expressed reservations. Anfavea's letter to the president argues that the quota system has been exploited to build up excessive inventories of imported vehicles. The association highlighted a 214% increase in registrations of imported electrified vehicles between 2023 and 2025, stating that Brazil is losing out on both tax revenue and the impact of domestically produced vehicles. Anfavea pointed to protectionist measures adopted by countries like the United States and the European Union to safeguard their national industries. The association emphasized that tariff exemptions negatively affect job creation in Brazil, asserting that "The preservation of the tariff recomposition schedule is also essential for the maintenance and creation of qualified jobs."

The quota regime was disproportionately appropriated by companies to increase inventories of imported vehicles in the country.

— AnfaveaStating their concern in an official letter to the President of Brazil regarding the import quota system.
DistantNews Editorial

Originally published by Folha de S.Paulo in Portuguese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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