Recently, the Brazilian Trade Protection Bureau sent a letter to the Chinese Embassy in Brazil, saying that it had concluded its anti-dumping review of auto tires imported from China. The reexamination result decided to impose an anti-dumping duty of 1.08 to 2.17 USD/kg on China’s auto tires for a period of 5 years. . The anti-dumping investigation began in the second half of 2012, mainly targeting 13-inch and 14-inch domestic mobile passenger car tires. The announcement was made on the findings and announcement of the results of last year's investigation.

At the same time, the INMETRO Conformity Assessment Board of Brazil reported that Brazil will impose deadlines for the labeling of automotive parts that are manufactured, imported, and sold in the domestic market. Once again, it stated that the statement involved various types of automotive products such as automotive glass, batteries, and rims, and different deadlines were set according to product categories.

From January to June 2013, China’s total export value of automotive products (including vehicles) in Brazil was US$804 million, a year-on-year increase of 13.0%, ranking seventh among China’s auto commodity export countries and regions. Customs statistics show that in 2012 China’s exports of motor vehicle parts and accessories to Brazil amounted to US$ 367 million, and Brazil became a new growth point for China’s auto parts exports. However, with frequent trade between China and Pakistan, trade frictions between the two sides have continued to increase. In recent years, China’s auto parts and components have frequently encountered the “big stick” of Brazilian policy.

Increased Brazilian protectionism

Deputy Secretary-General Yang Aiguo of the Automotive Sub-committee of the China Mechanical and Electrical Products Import and Export Chamber of Commerce said that although China’s auto parts products are exported to Brazil, Brazil’s dependence on China’s auto parts is not high.

That being the case, why does Brazil still impose restrictions on many auto parts products in China? In fact, since China's auto products entered the Brazilian market, especially since 2011, the growth rate in Brazil has been very rapid, which has caused a certain impact on the auto industry in Brazil. Therefore, the Brazilian government has formulated many restrictive policies to protect the interests of local companies, such as auto industry taxes, mandatory certification, and anti-dumping.

In September 2011, the Brazilian government promulgated a new regulation on the taxation of automotive products. The sales of automobiles in the Brazilian market must have a production rate of more than 65% for the parts of the country, and an average tax rate of 30% for the automobile industry. Relevant experts believe that Brazil’s auto industry product tax is mainly set up for China, South Korea and other countries. The policy itself is discriminatory, and it is a “ring circle” protection for local companies already stationed in the country.

In May this year, Brazil's National Metrology, Standardization and Industrial Quality Bureau approved new mandatory technical requirements for certain types of automotive components, covering the steering wheel, steering rods, tie rods and axial rods. As early as in 2009, Brazil issued an announcement that it will impose a final anti-dumping duty of US$0.75/kg on tires imported from China.

China's exports blocked

In order to protect the interests of local companies, Brazil adopts means of restricting imports, which will inevitably affect China’s exports of parts and components to Brazil and even affect other aspects.

Li Wentao, Minister of Overseas Business of Xingmin Steel Ring told reporters that the company started preparing Brazil's export business a year ago. Although local standards are different from existing standards, the impact of mandatory certification is not significant. This year's export business is basically the same as last year. It was flat and the performance in the second half of the year was not good.

However, Cao Jian, manager of the Export Certification Department of Hangzhou Weaving Standard Technology Co., Ltd. stated that there are more than a dozen parts and components that have been forcibly certified in Brazil. It is necessary to go through procedures such as data review, field audit, and product performance testing to obtain certification. Cao Jian said: “Hub certification is relatively easy, and battery certification is difficult, because in the battery certification process, companies need to provide a battery recycling program. These are the parts companies in China have never done before, do not know how to operate. ”

At the same time, the levy of anti-dumping duties on tires has also made the export business of tire companies bleak. The person in charge of tire export of Guangzhou Pearl River Tire Co., Ltd. told reporters that since the anti-dumping investigation in Brazil, domestic sales of tires in Brazil have decreased and profits have become lower, so from the beginning of this year, the company has given up its Brazilian export business.

Su Yongming, Manager of International Trade Department of Hangzhou Zhongce Rubber Co., Ltd., told reporters: “Acquisition of anti-dumping duties has a great impact on our tire sales. Since the Brazilian anti-dumping investigation on Chinese auto tires in the second half of last year, the number of tires exported to Brazil by the company has declined. Larger, the competitiveness of China's tires in the Brazilian market is declining, and profits have become less."

“Brazil’s increase in tax rates and anti-dumping duties have not been decided directly and will have a certain impact on the company.” Zhou Shengyun, tire minister of Race Wheel Tire Co., Ltd. said, “Since this anti-dumping investigation, the company’s tire exports to Brazil have declined. More than 30%."

Exit or fight

Yang Aiguo believes that in the face of Brazil’s protectionist policy, companies should actively respond to it. The exit of the export business of an enterprise is easy to open, and it is not easy to give up its own camp, especially in a country or region like Brazil, which has a mature market. The Brazilian auto market has a relatively high share in the international market.

The reporter learned from the relevant personages of the China Rubber Association that in the face of Brazil’s anti-dumping duties on China’s auto tires, the association is organizing companies to respond actively. Su Yongming also believes: "Although there are no specific measures yet, the company will actively appeal and communicate with the Brazilian side in a reasonable and effective manner."

Zhou Shengyun holds different views and believes that the litigation in the face of trade protection plays a minor role, and unless the Brazilian market has the strength to invest and build factories in the country, it will receive strong support from the Brazilian government. On the other hand, the Latin American market accounts for a certain percentage, but it is not very large, and there is the possibility of exploring other markets.

In addition, the person in charge of foreign trade sales of Triangle Tire Co., Ltd. also told reporters: “Brazil sales have been declining in recent years, and even worse than Venezuela. There are many other markets in South America that can be developed like Cuba, and we have developed a new market for South America. The feedback was good."

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