There is no free trade agreement between China and Pakistan, and tariffs on 28 types of chemical products exported to Brazil will be increased.

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The Executive Board of the Foreign Trade Chamber of Brazil (Gecex) issued Resolutions No. 963 and No. 969, temporarily increasing the import tariffs on 28 types of chemical products, with the tax rate for most categories raised to 20%. Since there is no free trade agreement between China and Brazil, the corresponding chemical products exported from China to Brazil will be subject to the newly increased tax rate, putting pressure on relevant export enterprises.

Core Rules of the Policy

This tariff adjustment will be implemented from October 17, 2026, with a validity period of 12 months, ending on October 16, 2027.

The new rules cover all non-preferential trading partners. China falls within the scope of consumption. Chemical items originating in China that are on the list and exported to Brazil will no longer enjoy preferential tax rates.

List of Taxable items

- Inorganic chemicals: Phosphoric acid (iron content less than 750 ppm, 17.5%), sodium chlorite (10.8%), sodium bicarbonate (20% to general grade, 9% to hemodialysis grade).

- Organic solvents and intermediates: Isobutanol, butanone, ethyl acetate, n-butyl acetate, adipic acid, maleic anhydride, fumaric acid and their salts and esters, hexamethylenediamine and its salts, monoethanolamine and its salts, with a tax rate of 20%; phenol and its salts, 12.6%.

- Polymer and additive items: Phthalate plasticizers, 20%; most anionic surfactants, 20%; polyethylene (including fillers), propylene copolymers, unsaturated polyesters, 20%; styrene polymers, graded at 18%/20%, with some special cases at 12.6%.

- Four types of thermoplastic resins (included in the Letec list, tax rate 20%): Low-density unfilled polyethylene, high-density polyethylene, unfilled polypropylene, PET with a viscosity index ≥78 ml/g.

Impact on Domestic Chemical Exports

China is a core supplier of chemical items to Brazil. to categories such as polymers, organic solvents, chemical intermediates, and sodium bicarbonate in the tax list, China's supply accounts to a relatively high proportion in Brazil's import market.

The tariff increase will immediately raise the export costs of domestic companies, weaken the price competitiveness of Chinese items in the Brazilian market, and might squeeze relevant export orders and profit margins.

In the short term, export companies face two choices: absorb the tariff cost themselves to maintain quotations, or raise product quotations. However, price increases will minimize product competitiveness and carry the risk of losing customers.

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