Brazil to cut import tariffs by 10 percentage points: economy minister

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© Reuters. Brazil's Economy Minister Paulo Guedes attends a session of the commission of the pension reform bill at the National Congress in Brasilia© Reuters. ’s Economy Minister Paulo Guedes attends a session of the commission of the pension reform bill at the National Congress in Brasilia

By Rodrigo Viga Gaier and Jamie McGeever

RIO DE JANEIIRO (Reuters) – Brazil plans to reduce import tariffs by 10 percentage points during the new government’s four-year term, Economy Minister Paulo Guedes said on Friday, a move away from the direction currently being taken by countries such as the .

Guedes announced the average tariff reduction at an event in Rio de Janeiro, saying there will be a cut of 1 percentage point in the first year, 2 in the second, 3 in the third and 4 in the fourth.

“The opening of the economy has to be exponential or Brazilian industry will suffer,” he said.

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Import tax rates in Brazil are mostly between 10% and 35%.

Guedes’ comments come as global trade war fears are on the rise again after the United States imposed a new set of tariffs on Chinese goods and negotiators entered a second day of talks looking for an agreement.

Guedes did not elaborate further on the plan but reiterated the government’s desire to push ahead with its reform agenda of widespread tax cuts, privatization and deregulation.

Before any of that, however, Congress must approve pension reform. Guedes said political support for the government’s flagship economic policy is rising but dialog with lawmakers is proving problematic and the path to approval is still not clear.

The government’s proposals include raising the minimum retirement age and increasing workers’ pension contributions, a package it says will save the public purse 1.237 trillion reais ($312 billion) over the next decade, boost sentiment and kick-start the economic recovery.

But public support for the bill is anything but stellar, as a poll published by the National Confederation of Industry showed earlier this week.

Guedes said pension reform is vital to ensure Brazil’s economy does not go the same way as Argentina’s, which he said is now in a critical state.

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