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UPDATE 1-Brazilian government cuts import tax on steel rebar to 4% from 10.8%

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BRASILIA, May 11 (Reuters) - Brazil’s government reduced the import tax on steel rebar to 4% from 10.8% to put the tariff in line with other countries’ practices, the Economy Ministry said on Wednesday.

Ana Paula Repezza, executive secretary of the Foreign Trade Chamber at the ministry, stated that the new rate corresponds “to the world average for these types of products”.

She told a news conference the move was technical and rejected the suggestion that it was designed to reduce inflationary pressures amid a surge in consumer prices to 12.1% in the 12 months through April.

After a meeting with Economy Minister Paulo Guedes on Tuesday, industry group Aço Brasil said that only steel rebars would be affected by the government’s decision to lower tariffs on several products, including steel.

According to Repezza, a reduction for other categories of steel products “is not yet under review as we have not yet received claims for other products”.

The Economy Ministry also announced the removal of import tariffs on food products starting from Thursday until year-end, in this case acknowledging the goal of easing inflation.

The measure will affect beef, chicken meat, wheat and wheat flour, crackers and biscuits, corn and other bakery products.

The government also canceled tariffs for imports of sulfuric acid, used in fertilizers, and reduced the rate for mancozeb fungicide to 4% from 12.6%, lowering agricultural production costs.

All products were included in the differentiated import tariff regime for Mercosur members, which allows rates to be zeroed without the need to negotiate with other members from the South American trade bloc.

President Jair Bolsonaro, who is seeking reelection in October, has already reduced taxation on industrialized products (IPI) and eliminated tariffs on ethanol and six other basic food products in an attempt to curb inflation. (Reporting by Marcela Ayres Editing by Chris Reese and Sandra Maler)

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