News from Brazil regarding China!

On December 5, 2025, the Brazilian Foreign Trade Commission announced that it will maintain an anti-dumping tax of up to 78.3% on car speakers originating from China, with the measure effective for five years. This decision means that the price advantage of related Chinese products in the Brazilian market will be nearly eliminated.

The anti-dumping announcement from the Brazilian Foreign Trade Commission on December 5 was a cold shower for Chinese car speaker companies! A tax rate of 78.3% and a five-year validity period directly wipe out the price advantage.

The original ruling. Behind what seems to be a common trade barrier lies Brazil's anxiety to protect its local industry, the undercurrents of global supply chain restructuring, and the difficult chess game of Chinese manufacturing breaking through.

Brazil's tariff calculation method can be described as a "precise strike." For example, with a factory price of $100 for a Chinese car speaker, the landed price skyrockets to $178.3 after adding a 78.3% tariff, nearly twice as expensive as Brazilian brands.

Even more deadly, Brazil's customs have raised the bar on "origin rules"—requiring that the speaker chips must use rare earths refined from South American minerals, while 80% of the world's rare earth refining capacity is controlled by China. This form of "indirect tax" completely erodes the price advantage of Chinese products.

Financial reports from the Brazilian local company ASK do Brasil show that its market share increased from 12% to 27% in 2024, yet its net profit margin dropped from 15% to 9%.

The truth behind this is that to offset tariff costs, Brazilian car companies are forced to accept high-priced supplies, leading to an increase in the total vehicle cost of 2300 reais (about $460). São Paulo car dealer Carlos Silva revealed: "Now selling a car equipped with Chinese speakers, the profit is not enough to pay commission to the sales staff."

Brazil's actions conceal a technical positioning strategy. The revised "Industrial Product Technical Standards Law" in 2024 added 37 certification clauses for acoustic devices, 9 of which directly target Chinese products.

For example, it requires that speakers operate continuously for 500 hours without failure in environments ranging from -20℃ to 50℃, while similar products from Brazilian local companies only pass tests from -10℃ to 40℃. Such "customized" standards force Chinese manufacturers to redesign their product lines.

The Brazilian government's operations are full of contradictions. On one hand, it imposes taxes on Chinese speakers, while on the other hand, it increases procurement of Chinese new energy vehicles. In the first 11 months before 2025, BYD sold 126,000 electric vehicles in Brazil, accounting for 38% of its total sales.

90% of the audio systems in these cars come from China, yet Brazilian customs exempted tariffs on the grounds that the "localization rate of the complete vehicle exceeds 60%." This form of "selective enforcement" exposes its true intentions: wanting to benefit from Chinese manufacturing while also protecting local businesses.

Historical lessons should be heeded. After Brazil imposed tariffs on Chinese photovoltaic components in 2019, Chinese manufacturers turned to export to Argentina, then transported them to Brazil overland. As a result, Brazil's photovoltaic installation volume plummeted by 42% within two years, and electricity prices rose by 37%.

Now, re-enacting this scene in the speaker field, Brazilian consumers will become the ultimate payers. Luis Fernando, an economics professor at the University of São Paulo, warned: "Raising the cost of automotive components is equivalent to shackling the entire manufacturing industry."

The response strategies of Chinese car companies are noteworthy. Chery has launched a sound system production line at its Brazilian factory, using local assembly to avoid tariffs; Great Wall Motors has collaborated with Harman International to develop customized products.

However, these "localization" operations are costly—Chery’s Brazilian factory has a capacity utilization rate of only 65%, because each set of speakers produced requires paying Brazilian workers three times the hourly wage of their Chinese counterparts.

Brazil's tactics are spreading into high-tech fields. In October 2025, Brazil initiated an anti-dumping investigation into automotive chips from China, accusing Chinese companies of "dumping at prices below cost."

The investigation targets leading companies such as Zhaoyi Innovation and Weir Shares, involving amounts exceeding $5 billion. This form of trade war model "spreading from downstream to upstream" is eerily similar to the methods the United States used to suppress Huawei back in the day.

However, the counterattack from Chinese companies is equally sharp. DJI launched a "drone + car sound system" package in Brazil, using flying performances to attract consumers and indirectly promote its own brand audio.

This "cross-border bundling" strategy has led to an 8% shrinkage in market share for Brazilian local brands within three months. Brazilian Minister of Science and Technology Marcos Pontes privately admitted: "We might have miscalculated."

The essence of this trade war is the struggle for standard discourse power. Brazil is promoting the "South American Automotive Sound Alliance," attempting to unite Argentina and Chile to establish regional technical standards. Once formed, Chinese products will face higher barriers to entering South America.

But China is also laying out countermeasures—by 2025, the New Development Bank of BRICS approved a $10 billion loan to specially support member countries in building their own certification systems.

At the São Paulo Auto Show, a contradictory phenomenon is unfolding: booths of Chinese manufacturers are crowded with buyers, while the exhibition area of Brazilian local enterprises is deserted.

This contrast confirms economists' judgment: "When tariffs become the norm, the market will ultimately choose more efficient producers." Data from the Brazilian Automotive Industry Association shows that in the first three quarters of 2025, the failure rate of models using Chinese components is 41% lower than that of local products, with maintenance costs saving 27%.

From photovoltaics to chips, from steel to audio, Brazil's trade protectionism is creating a lose-lose situation. Chinese manufacturers are losing the market, Brazilian consumers are bearing high prices, and the global supply chain is being forced to restructure.

Historical experience shows that any attempt to block technological progress with tariffs will ultimately leave the domestic industry stagnant.

As Carlos, a dockworker at the Port of Rio de Janeiro, said: "Ten years ago, we cheered for containers filled with Chinese goods; now we have to pay more tariffs for these boxes." This war without gunpowder reminds us: in the retreat of globalization, only by adhering to innovation and cooperation can we avoid being swallowed by the current.