Ethanol, Plastic, Health and Telecom: What can be taxed by Trump

Steel and aluminum have already been taxed. Measure began to be valid yesterday, with import rate of 25% of national products. Although the impact is estimated at R $ 8.7 billion, according to the IPEA (Institute of Applied Economic Research), the actual impact can mean only 0.01% of GDP (Gross Domestic Product) and 0.03% of total exports in Brazil.

Ethanol is one of the products that is in the target. Since last year, Camex (Foreign Trade Chamber of Brazil) has established 18% tariff on US ethanol imports. Already the Brazilian product sold to Americans pays 2.5%. Despite being the second country that most buys Brazilian ethanol, less than 20% of all exported product goes to the United States. Evaluation by experts to Facto News points out that the impact will be small for Brazil

Polyethylene, a type of plastic, can also be taxed by Trump. Today, Brazil charges 20% imported chemical fee, but the index may increase to 41%. Since last November, anti -dumping investigation has been underway on the importation of Canada and United States resins. Dumping is a commercial practice where a company sells the product to the foreign market for a price lower than the actual value. The United States account for 70% of all imports to the Brazilian market, still according to the private market survey.

Reciprocity can reach the health market, seen as an opportunity by Americans. The private sector points out that Brazilian legislation is outdated and pays off supply chains and limit access to essential health products – and consequently, their coming here. There is no official nod in this regard, but the hypothesis is that Trump can “hinder” the presence of Brazilian companies in the sector.

The same situation can happen with telecommunications, pharmaceutical industry and intellectual property. The sectors went into the sights of the US market, but have not yet been officially cited by the US President.

For Brazilian negotiators, it was evident that the White House will use trade as a bargaining weapon. But in the case of Brazil, the argument of the government and the private sector is that the relationship is already favorable to Americans, and that Trump’s justification would make little sense. An analysis of commercial flow between the two countries from official data shows that Brazil charges an average of 11% import fee from the rest of the world, against about 5% of what comes from the US.