Brazilian steelmakers are concerned that the domestic industry will struggle if President-elect Jair Bolsonaro reduces or does away with import tariffs when he takes office in January 2019, sources told Fastmarkets MB last week.
Other market participants, however, do not believe any changes will be done abruptly or without corporate tax reforms. The new federal administration's future minister of economy, Paulo Guedes, has said that the Brazilian market should open itself up to foreign trade because he believes the country is too protected by subsides and import duties. Enabling a more open market was a pillar of Bolsonaro's presidential campaign in the country's general election. "Tariff and barrier reductions, in parallel with new bilateral agreements" were key pledges in his campaign. Speaking at an investor meeting last Thursday November 22, steelmaker Gerdau's chief executive officer, Gustavo Werneck, said the president-elect should solve Brazil's competitive imbalance with other countries before opening the local market to imports. "We can compete... with any steelmaker around the world [given a level playing field]," he said, "but our exports always include around 7% in taxes. Reforms must be done...