Strong criticism in Brazil of the new tax to import cars that Argentina put

The Argentine Government’s decision to increase the value of the dollar to import with a 7.5% surcharge provoked the anger of the association that brings together car manufacturers in Brazil, one of the sectors with the greatest commercial exchange between the two countries. According to the president of ANFAVEA, the measure violates the current bilateral trade agreement between Brazil and Argentina.

The criticism comes because the 7.5% rate that applies to imported products also covers vehicles and does not exclude Mercosur products.

It must be remembered that both countries have a common automotive regime that establishes the conditions of bilateral trade.

“The measure means that the product made locally in Argentina is 7.5% cheaper than the Brazilian one, in terms of taxes,” said Márcio de Lima Leite, president of the entity, according to the Autodata site.

“It is flagrantly contrary to the bilateral agreement that regulates foreign trade, since it is an import tax disguised under another name. The bilateral agreement must work as a stimulus for the countries and not the other way around”

The manager estimated that the measure will further affect the flow of exports, which is already decreasing. Despite the fact that the Argentine market advanced 12% from January to July 2023, going from 253,000 to 277,000 units, Brazilian exports to the country decreased by 2.6%, from 84,000 to 81,000 units.

This occurs in a context where Argentina increased the restrictions on the entry of foreign vehicles and, throughout July, it did not authorize the import of 0 km of any origin by the companies associated with ADEFA.

The leader recalled that the Argentine government initially created a tax on luxury cars of up to US$ 25,000 and now extended the tax to all imported vehicles.

“Even the components manufactured in Brazil end up suffering this impact with the incidence of the PAIS, which can also affect competition and even the price of the vehicle produced in Argentina.

“Last week we presented our complaint to the MDIC related to the competitiveness problems that this measure will bring. I had a meeting with the Vice President of the Republic, Geraldo Alckmin, and now we will have other meetings involving the embassies of the countries. The goal is for the Argentine government to review this decision,” said the manager.