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Brazil to cut import tariffs by 10 percentage points: economy minister
FILE PHOTO: Brazil's Economy Minister Paulo Guedes attends a session of the commission of the pension reform bill at the National Congress in Brasilia, Brazil May 8, 2019. REUTERS/Adriano Machado

Brazil to cut import tariffs by 10 percentage points: economy minister

RIO DE JANEIIRO: Brazil plans to reduce import tariffs by 10 percentage points during the new government’s four-year term, Economy Minister Paulo Guedes said, a move away from the direction currently being taken by countries such as the United States.

Guedes announced the average tariff reduction at an event in Rio de Janeiro, saying there will be a cut of 1 percentage point in the first year, 2 in the second, 3 in the third and 4 in the fourth.

“The opening of the economy has to be exponential or Brazilian industry will suffer,” he said.

Import tax rates in Brazil are mostly between 10% and 35%.

Guedes’ comments come as global trade war fears are on the rise again after the United States imposed a new set of tariffs on Chinese goods and negotiators entered a second day of talks looking for an agreement.

Guedes did not elaborate further on the plan but reiterated the government’s desire to push ahead with its economic reform agenda of widespread tax cuts, privatization and deregulation.

Before any of that, however, Congress must approve pension reform. Guedes said political support for the government’s flagship economic policy is rising but dialog with lawmakers is proving problematic and the path to approval is still not clear.

The government’s proposals include raising the minimum retirement age and increasing workers’ pension contributions, a package it says will save the public purse 1.237 trillion reais ($312 billion) over the next decade, boost investor sentiment and kick-start the economic recovery.