-- One after another, Latin American nations are following in the footsteps of the US and Europe by imposing prohibitive tariffs on Chinese imports — a strain in what’s been an otherwise cozy relationship.Jamie Dimon Says Succession at JPMorgan Is ‘Well on the Way’Mexico, Chile and Brazil have hiked — and in some cases more than doubled — duties on steel products from China over the past several weeks. Colombia may be about to follow suit.
Pushing back against China, however, can be fraught with risks — particularly for smaller export-driven economies that rely on Chinese demand for their raw material sales, from cherries to copper. Chile’s economy, for instance, has benefited greatly from sending raw materials to China and buying back processed or manufactured goods. The country’s free-trade strategy — including bilateral accords with China and the US — opened up huge markets for its grapes, wines, salmon, wood pulp and minerals, helping it become one of the region’s most prosperous nations.
The problem is when some of that steel makes the return trip, it arrives to Brazilian manufacturers at a heavy discount to prices charged by local steel mills owned by Gerdau, CSN and ArcelorMittal. Though Chinese spending in the region has slowed of late, investments have continued in key industries. Industrial and Commercial Bank of China has grown in Argentina. In Brazil, electric car juggernaut BYD Co. is building its first factory outside Asia, and is planning to announce another in Mexico by year-end. In Chile, BYD and Tsingshan are developing lithium cathode factories.
Then of course, there’s the issue of steel dumping, the practice of selling the product for far less than local competitors. Raising tariffs won’t be enough to stop it in Brazil, said Humberto Barbato, who heads the nation’s electronics industry association, Abinee, a significant steel consumer. Instead, the government should prioritize the purchase of products with local content, he said. “The Chinese have a lot of flexibility to change the price.
The US-made Bell 212 that crashed on Sunday with President Ebrahim Raisi, Foreign Minister Hossein Amirabdollahian and several members of their entourage on board was most likely purchased during the rule of Shah Mohammad Reza Pahlavi.
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