Monday, September 19, 2011

Brazil levies imports of Chinese steel tubes

President Dilma Rousseff has vowed to defend Brazil’s markets from “unfair competition” from imported goods as her government slapped anti-dumping duties on imports of Chinese steel tubes.
The comments come as Brazil and other countries with strong currencies are taking stringent measures to protect their industrial competitiveness, with Switzerland on Tuesday setting a ceiling on its currency.

“Let me make clear that my government will not allow attacks on our industry and jobs,” said Ms Rousseff in her address on the eve of Brazilian independence day on Wednesday. “We will never allow foreign goods to compete unfairly with our products.”
Brazil has watched with increasing concern as a more than 40 per cent appreciation of its currency, the real, since 2008 has eroded the competitiveness of domestic industries against cheap imports, particularly from China.

The government, which was among the first to warn that the weak US dollar could lead to a “currency war”, has introduced numerous capital and currency controls aimed at discouraging speculative foreign fund inflows to take advantage of a strong real.

Last week, Brazil’s central bank shocked markets with an abrupt 50-basis point cut in the benchmark Selic interest rate even as inflation hit a six-year high of 7.2 per cent in the 12 months to the end of August.
The cut was seen by some economists as partly aimed at discouraging foreign fund inflows seeking to take advantage of Brazil’s high interest rates. These inflows in turn drive up the value of the real against the dollar.
In her national day address on television and radio, Ms Rousseff said Brazil was well placed to withstand a slowdown in the global economy, amid record low unemployment and buoyant consumer spending.

But she warned that Brazil would do everything it could to stave off any attempts by foreign producers to compensate for weakness in western markets by dumping goods in Latin America’s biggest economy.
“In the case of the current international crisis, our principal weapon is to expand and defend our internal market, which is one of the most vigorous in the world,” Ms Rousseff said.
The government said it would charge an anti-dumping duty of $743 per ton on a variety of steel tubing made in China used in the oil and gas industries.

It also raised tariffs on bicycles, bicycle tyres, air conditioners and four other items under its Mercosur trade agreement with Argentina, Uruguay and Paraguay.

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