For Americas Quarterly
Protectionism made news again in Brazil recently, when Finance Minister Guido Mantega announced that Brazilian firms could avoid a 30 percent tax increase on the auto industry by improving fuel efficiency, using Brazilian-made parts and investing in Brazilian research and development. Foreign automakers without a manufacturing plant in Brazil will be subject to the tax hike, Veja noted.
The program is designed to encourage innovation in technology and fuel efficiency, Mantega argued. Any negative effect on foreign imported cars, he said, was merely collateral damage.
It’s no surprise he is feeling a little defensive.
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