Brazil vows trade defence, targets Chinese steel

BRASILIA, (Reuters) – Brazil vowed yesterday to  defend its domestic industry against unfair competition and  slapped import tariffs on select Chinese steel products.
It is the latest in a series of measures to defend  struggling domestic manufacturers and help shield Latin  America’s largest economy from the fallout of global financial  turmoil.

The Latin American economic powerhouse will impose an  anti-dumping tariff of $743 per tonne on steel pipes, the  government’s foreign trade chamber said. The levy will be valid  for five years.

The pipes are used in Brazil’s oil and gas industry, which  is booming following big hydrocarbon discoveries in recent  years.

The move is part of a broader effort by President Dilma  Rousseff, who took office on Jan. 1, to get tough on imports  and protect domestic jobs.

“(We) will never allow foreign goods using unfair  competition against our products,” Rousseff said on a  nationally televised address on the eve of Brazil’s  Independence Day.

“In the current crisis our main weapon is expanding and  defending our internal market,” she said.

Economic growth is expected to slow to just under 4 percent  from 7.5 percent last year. But Rousseff said domestic consumer  demand was still strong, in part due to record employment and  wages.

Still, many Brazilian manufacturers have been losing market  share at home and abroad to foreign competitors.

Industry grew only 0.2 percent in the second quarter,  compared with overall economic growth of 0.8 percent from the  previous quarter.

Industry leaders say Brazil’s expensive currency and  Chinese export subsidies are at fault.

Finance Minister Guido Mantega said last week that Brazil  would fight back against any new round of quantitative easing  in the United States by taking fresh measures to protect its  currency.

The currency war could get worse, said Mantega, who coined  the term to describe how countries are weakening their  currencies to try to gain an upper hand in global trade and  stimulate their economies.

But a rising tax burden and low productivity at home are  equally to blame for the falling competitiveness of Latin  America’s largest economy, analysts say.

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