A Brazilian economist has criticized the recent increase in import taxes, arguing that historical experience shows this policy fails to generate investments, innovation, or productivity. In an article in Folha de S.Paulo, the author highlights flaws in the official justification and negative impacts on competitiveness.
The economist, co-founder of the Centro de Debate de Políticas Públicas (CDPP), former director of international affairs at the Central Bank, and coordinator of the book 'Integração Comercial Internacional do Brasil', published an opinion piece in Folha de S.Paulo on March 2, 2026, titled 'The Mistake in Increasing Import Taxes'.
He examines the technical note from the Secretaria de Política Econômica, which justifies the measure based on the strategic role of capital goods and information and communication technologies (TICs) in economic growth, citing economist Michael Kalecki. The author argues that raising tariffs is presented as a tool to transform the sector, but the note fails to explain why this would happen, treating hypotheses as established facts.
According to the text, Brazil's experience with import substitution initially aided in building the industrial base, but its continuation without transitioning to external competition led to negative effects on productivity and international integration. Prolonged protection, the economist states, reduces competitive discipline, weakening incentives for efficiency and innovation, resulting in business complacency.
Brazil faces prolonged productivity stagnation and loss of competitiveness, with challenges on the supply side, such as efficiency and resource allocation. The measure works through the 'rebalancing of relative prices in favor of the national product', making imports more expensive and protecting domestic goods, which implies costs for consumers and production chains, as well as inflationary risk – effects not addressed in the note.
Modern economies integrate global value chains, and importing capital goods and TICs allows access to cutting-edge technologies, not necessarily deindustrialization. The author concludes that the country has adopted this model for decades without achieving goals, persisting with an ineffective and costly policy.
