Lula Scraps 20% Tax on Imports Under $50 Ahead of Brazil Election
Updated
Updated · Bloomberg · May 12
Lula Scraps 20% Tax on Imports Under $50 Ahead of Brazil Election
2 articles · Updated · Bloomberg · May 12
$50-or-less imports will no longer face Brazil’s 20% levy after President Luiz Inacio Lula da Silva revoked the charge less than five months before the election.
The tax had become widely unpopular, and the rollback is aimed at lifting Lula’s standing with voters before they head to the polls.
Brazil introduced the levy in 2024 to shield local retailers from low-cost Asian e-commerce platforms including Shein, Shopee and Temu as they expanded in Latin America’s largest economy.
The reversal underscores the political pressure created when consumer costs collide with efforts to protect domestic businesses.
By axing the 'Shein tax' for votes, has Lula gambled away Brazil's industrial future?
With a key tax barrier gone, can local champion Mercado Libre fend off cheaper Asian rivals in Brazil?