Brazil Cottons on to US Subsidies, Introduces Tyre Tariffs
US exporters have been hit with an additional tariff by Brazil, a WTO-backed retaliation for what it calls “illegal” subsidies to US cotton farmers, reports Tire Review. Brazil’s new tariff structure, set to engage in 30 days barring a last minute agreement between the two countries, hits a wide range of products, including cars (from 35 to 50 per cent), cotton and cotton products (a full 100 per cent increase) and – most importantly around these parts – tyres (jumping from 16 to 32 per cent). In all, some 100 goods are now subject to higher import rates by Brazil, and could total $830 million annually.
Trade analysts say that the US’s subsidies of cotton farmers have given them an unfair market advantage. In 2008, the WTO ruled that the subsidies were discriminatory. In a news conference, Carlos Marcio Cozendey, head of economic affairs at Brazil’s foreign ministry, said, “The idea was to distribute the retaliation broadly in order to maximize pressure. US farm subsidies are condemned worldwide. This archaic practice must stop.”