By Waldaniel Amadis | 2025-03-18

SAO PAULO, Brazil -- Brazil's National Association of Motor Vehicle Manufacturers (Anfavea) is considering requesting an investigation by the Ministry of Development, Industry, and Foreign Trade of alleged "dumping" by Chinese electric car manufacturers.

The proposed measure seeks to impose an immediate 35% tariff on Chinese cars to curb their growing dominance in Brazil's electric vehicle market. Chinese automakers account for half of all imported vehicles, while Brazil struggles with declining exports.

"Brazil has become a dumping ground for Chinese cars," Anfavea President Marcio Leite told Bloomberg Linea in late January.

The proposed measure primarily targets Chinese manufacturers BYD and GWM, which have gained market share since entering Brazil and are now building local plants.

According to Anfavea's yearbook, these two companies accounted for 60% of all electric vehicle imports by Brazil last year. They leveraged tariff-free exports until the end of 2024, flooding the market with vehicles before a 10% tariff took effect on January 1.

This tariff will gradually rise to 35% by 2026.

Anticipating the increase, Chinese automakers -- especially BYD -- accelerated exports by two years, leading to a backlog of more than 70,000 unsold vehicles at Brazilian ports. Bloomberg now estimates the stockpile at about 50,000 units.

BYD denies dumping allegations, accusing Brazil's auto industry of "trying to mask its lack of competitiveness." Meanwhile, Anfavea insists it supports "free competition and measures to prevent market distortions that harm the Brazilian automotive market."

Steel industry alarm

In 2024, Brazil registered 466,500 imported vehicles -- a 33% jump, the highest in a decade -- of which 200,000 were Chinese, according to Bloomberg Linea.

Meanwhile, exports dropped 1.3% to 398,000 units, with Brazil's share in the Latin American market shrinking from 24% to 17%.

Despite declining exports, Brazil strengthened its position as the world's sixth-largest auto market, recording 2.6 million vehicle registrations -- both domestic and imported -- marking 14.1% growth.

The National Steel Company (CSN), one of Brazil's largest steel producers, warned on March 13 that the "unfair" surge of cheap Chinese steel imports is severely undermining the economy.

"Brazil is still the world's backyard for China to send materials," said CSN executive Luiz Martinez.

In response to a flood of Chinese-led imports, Brazil introduced an import quota system in 2024. However, Martinez called the measure "ineffectual" in protecting the industry's competitiveness.

He urged Brazil to follow the example of other nations by increasing tariffs on Chinese steel.