Threat to the economy: Brazilian industry under siege with increasing imports, investments at risk and a uncertain future if urgent measures are not taken
Brazil is about to face a perfect storm in the industrial sector, with the potential for colossal losses of $ 500 billion in investments by 2027. This alarming information comes from Brazil Coalition, which represents 14 entities from different economic sectors, which issued a warning about the growing import de chinese products. Among the most worrying items are steel, automobiles and toys, which are flooding the market and threatening the Brazilian economy .
“It’s time to act, or we will be swallowed up by this avalanche!” This is a concern shared by the experts who make up the Coalition. They emphasize that if the import situation remains unchanged, 57% of $ 825,8 billion planned investments between 2023 and 2027 may disappear. The urgency of government measures is more evident than ever, according to the website terrabrasilnoticias.
Urgent measures demanded by the Brazil Coalition
A Brazil Coalition are not just raising flags; they have also fulfilled a list of demands. First, representatives of the affected sectors are calling for a interest rate more competitive. Currently, a company faces an average rate of 23% per year, considered exorbitant for a healthy economic scenario. Furthermore, it is essential to implement a fairer tax system, aligned with tax reform expectations, and to create a level playing field to avoid the protectionism .
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The impacts of Chinese imports on national industry
Marco Polo de Mello Lopes, president of Brazil Steel Institute , expressed his concern about the direct predatory . He compares the situation to a real “Chinese tsunami” , which is impacting several segments of the national industry.”Government response is crucial to protect our investments and investments", He emphasizes.
To make matters worse, in the textile sector, imports increased by 13% in the first half of this year alone, while domestic production only grew by 3%. In the automotive sector, the increase in imports of Chinese vehicles reached impressive levels. 800% . Marcio de Lima Leite, president of Anfavea , highlights that the current scenario could lead to a stagnation in the growth of industry Brazilian
Why are Chinese products dominating the market?
A China adopts an aggressive policy to export its surplus production at below-market prices, which harms the industry location.”They are playing with us on a football field where the rules don't apply.”, says an expert. Economist Igor Barreto, from Itaú, explains that the orientation of Chinese economic policy is a contribution to the transformation industry with a focus on exports.
This scenario is creating an environment where products such as chemicals, semi-finished metals, plastics and textiles are increasingly being imported, while prices fall, making it impossible for Brazilian manufacturers to compete.
The future of Brazilian industry: a challenge in sight
A Brazil Coalition is drawing attention to the need for comprehensive measures to protect the industry national level. This includes tax simplification, reducing bureaucracy and improving infrastructure. In addition, macroeconomic stability is vital to create a favorable investment environment.
A energy transition and decarbonisation are also in the crosshairs, considering that the Brazil cost hits BRL 1,7 trillion in excess spending compared to countries in the OECD . invasion of Chinese products, therefore, it is not just a question of import; it is a question of survival for Brazilian industry.
Therefore, import unbridled demand for Chinese products poses a real threat to investments in transformation industry of Brazil. The Brazil Coalition is working tirelessly to alert the government and society about the need for appropriate action. Collaboration between affected sectors and authorities is essential to ensure sustainable growth of Brazilian economy and the protection of local jobs.