Brazil grants BYD exemption from EV tariff hike, but not for as long as sought
The decision was reached in a closed-door session of the Chamber of Foreign Trade (Camex) on Wednesday but not released publicly until Thursday. It follows weeks of heavy lobbying on both sides, with
carmakers warning of mass lay-offs and BYD accusing rivals of trying to shut out competition
Under the measure, BYD will be allowed to import up to US$463 million worth of semi-assembled electric and hybrid vehicles over a six-month period without paying import taxes. This tariff-free window will apply during the first half of 2026, offering short-term relief as BYD ramps up local production.
Separately, the government decided to bring forward a previously scheduled levy increase. The import tariff for electric and hybrid vehicle kits will now rise to 35 per cent in January 2027, a year and a half earlier than the original July 2028 timeline. Fully assembled vehicles will reach the same 35 per cent rate by July 2026, as previously planned.
BYD had requested a reduced tariff through mid-2026 to ease the ramp-up of its new manufacturing plant in Camaçari, Bahia State. The company, investing R$5.5 billion (US$978 million) in the facility, argued that temporary relief was necessary as it builds up its local production capacity.
But the proposal triggered an immediate backlash. In a joint letter to President Luiz Inácio Lula da Silva, the National Association of Automotive Vehicle Manufacturers, or Anfavea, warned that the exemption could put R$180 billion in planned investment at risk and eliminate as many as 50,000 jobs.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
South China Morning Post
15 minutes ago
- South China Morning Post
From friends to foes: what's behind Trump's Brazil-India wrath
As eight Brazilian senators settled into their seats on a flight to Washington on a dry winter evening last month, a single question overshadowed the deep political differences that separated some of them: could they stop the Americans from imposing a tariff that threatened to gut their country's vital export revenues? They had begun to feel a sense of urgency weeks earlier, forcing them to put aside a stand-off between President Luiz Inácio Lula da Silva and former president Jair Bolsonaro that has reverberated beyond the country's borders. In early July, US President Donald Trump raised duties on Brazilian goods to 50 per cent, up from the 10 per cent imposed in April. He spoke of national security, but in Brasilia, many read the move as payback for what Trump claimed was Brazil's meddling in the fate of Bolsonaro, an ally of the US leader, who was accused of attempting a coup in 2021. A day later, the delegation – a cross-party group that included Bolsonaro's former agriculture minister Tereza Cristina, Lula's Senate leader Jacques Wagner, and Marcos Pontes, a senator from the former president's political bloc – landed in the US capital. The answer came swiftly. The White House refused to meet them. Republican US senators loyal to Trump kept their distance. Only Thom Tillis, a rare Republican Trump critic, with little sway over trade policy – and soon to retire – agreed to talk. Most of their time was spent with Democrats, who were cordial and sympathetic but powerless to change the Trump administration's course. By late summer, the tariff no longer looked like an isolated trade fight. India, long seen by Washington as a key democratic counterweight to China's influence in the strategic Indo-Pacific region, faced similar levies, additional penalties and sharp public rebukes.
South China Morning Post
15 hours ago
- South China Morning Post
Hong Kong exporters ‘relieved' over extended US-China truce, but worries linger
Hong Kong exporters have expressed relief after a 90-day extension to a trade tariff truce between China and the US, with worries easing over potentially affected shipments bound for the world's largest consumer market ahead of the major Thanksgiving and Christmas holiday seasons. But while the move provides a reprieve from the trade dispute escalating, it has not alleviated lingering uncertainties that have dampened business confidence, according to the city's trade representatives and observers. Some companies have expanded operations to Africa and South America to reshape global supply networks. Kennedy Wong Ying-ho, a lawmaker and honorary president of the Hong Kong Chinese Importers' and Exporters' Association, said the truce gave manufacturers and exporters enough time to prepare for the Thanksgiving and Christmas rush. 'I believe exporters and manufacturers will breathe a sigh of relief,' Wong said. 'The year-end peak for exports will basically remain unaffected because [more expensive] flights will need to be taken if goods cannot be shipped before October.' He added that despite the reprieve, he expected exports to decline slightly in August, following surges in May and June when companies rushed shipments before the previous 90-day truce ended in July. He said he believed a rebound was likely to occur in September, which was a critical month for shipments by sea to North America.
South China Morning Post
16 hours ago
- South China Morning Post
US and Chinese trade teams to meet again in 2 to 3 months, Trump's Treasury chief says
US trade officials will meet again with their Chinese counterparts within the next two or three months to discuss the future of the economic relationship between the two countries, Treasury Secretary Scott Bessent said on Tuesday. The comments come a day after the trading partners extended a tariff truce for another 90 days, staving off triple-digit duties on each other's goods. In an interview on Fox Business Network's Kudlow, Bessent also said Chinese President Xi Jinping had invited Trump to a meeting, but one had not been scheduled. 'There's no date,' Bessent said. 'The president hasn't accepted yet.' Trump told CNBC earlier this month that the US and China were getting very close to a trade agreement and he would meet Xi before the end of the year if a deal was struck. Bessent also said on Fox Business that the US will need to see 'months, if not quarters, if not a year' of progress on fentanyl flows before it considers reducing tariffs on China.
