On October 1, 2012, the Brazilian government raised temporarily its customs tariffs on imports of 100 products. The increase in tariffs range from 5 to 25 percentage points, depending upon the product. The new measure covers agricultural, chemical, aluminum, paper, glass, steel, automotive and electrical products. Many of these products are exported from the United States and thus these increased tariffs may adversely affect the operations of U.S. exporters.

The purpose of the tariff increase is to lessen foreign competitive pressure on the domestic industry, and stimulate investment and production in Brazil. This increase is valid for a period of 12 months and applies to imports from all countries except other Mercosur Members (Argentina, Uruguay, Paraguay and Venezuela). The tariffs on imports into the other Mercosur members remain unchanged.

The Brazilian government will monitor import volumes, consumer prices and new investments in Brazil by domestic industries to ensure that the measure achieves its desired result. The Brazilian government has indicated that it will remove or add new products as required by the circumstances, in particular if the price impact on consumers and downstream products is too severe or expected domestic investments do not materialize.

The Brazilian government is also preparing a second list of 100 products for which it plans to temporary increase tariffs later this year, probably in November of 2012. The procedures and schedule for interested parties to submit views and comments on the second list will be published shortly. This comment period may also provide an opportunity to submit views and information on the products already on the first published list, for which no such opportunity was granted.