On October 17, 2026, Resolutions No. 963 and No. 969 issued by Brazil's Chamber of Foreign Trade (Gecex) officially took effect, temporarily raising import tariffs on 28 categories of chemical and polymer products. The vast majority of these categories are hit with a 20% tariff rate, valid for 12 months until October 16, 2027. Since there is no free trade agreement between China and Brazil, Chinese exports of the listed products will directly face this increased rate without any preferential arrangements.
For chemical foreign trade professionals, the real risk is not simply "paying an extra 20%," but rather that for the same product, slight differences in grade or parameter labeling can result in vastly different applicable tax rates. This is a compliance knockout match centered on the precision of documentation.
I. The Policy Foundation: Not Just a "Tax Hike," but Selective Protection
The legal basis for this adjustment comes from the exception mechanism of the Mercosur Common External Tariff. Resolution No. 963 included 24 NCM codes in a list for temporary tariff increases due to "trade imbalances caused by the international situation," while Resolution No. 969 placed another 4 categories of thermoplastic resins on the List of Exceptions to the Common External Tariff (Letec), uniformly applying a 20% rate.
The Brazilian Chemical Industry Association (Abiquim) explicitly welcomed the measure, stating that it "recognizes the strategic importance of the chemical industry to the Brazilian economy" and helps create "more balanced competitive conditions." Against the backdrop of insufficient operating rates in Brazil's domestic chemical plants and continuously rising imports, the essence of this round of tariffs is targeted industrial protection, not a universal trade restriction. Understanding this is crucial for companies to judge the continuity and future direction of the policy.
II. The 28 Affected NCM Codes: A Tiered List
This list is not uniformly 20%; it presents a clear tariff gradient, with some categories subject to vastly different rates based on parameters or grades.
Inorganic chemicals: Phosphoric acid (with iron content below 750 ppm) is subject to 17.5%, sodium chlorite 10.8%, and sodium bicarbonate shows an extreme divergence between industrial grade at 20% and hemodialysis grade at 9%.
Organic solvents and intermediates are the core area covered by the 20% rate: isobutanol, methyl ethyl ketone (MEK), ethyl acetate, n-butyl acetate, adipic acid, maleic anhydride, fumaric acid and its salts and esters, hexamethylenediamine and its salts, and monoethanolamine and its salts all face 20%. The rate for phenol and its salts is relatively moderate at 12.6%.
Polymers and additives: Phthalate plasticizers, anionic surfactants (mostly), filled polyethylene, propylene copolymers, and unsaturated polyesters fall into the 20% bracket; styrene polymers are split into 18% or 20%, with some exceptions at 12.6%.
Four types of thermoplastic resins are separately listed on the Letec, uniformly subject to 20%: low-density unfilled polyethylene, high-density polyethylene, unfilled polypropylene, and PET with a viscosity index ≥78 ml/g.
III. The Biggest Hidden Trap: Grade Equals Tax Rate
The "20% vs. 9%" for sodium bicarbonate is the most cautionary example in the entire list. The logic of the Brazilian authorities is very clear: only special grades that cannot be produced domestically in Brazil are eligible for the lower tax rate.
This means the commercial invoice, product description, and parameter labeling must form a word-for-word match with the exemption clauses. Broadly writing "sodium bicarbonate" or "industrial grade" will cause the customs system to default to the 20% bracket. To apply the 9% rate for hemodialysis grade, the intended use, purity standards, and corresponding medical-grade parameters must be clearly labeled on the commercial invoice and technical documents, forming a complete evidence chain that can be digitally verified by customs.
The same logic applies to phosphoric acid—the parameter of iron content below 750 ppm directly determines whether the 17.5% rate applies. Wrong parameters mean the wrong tax rate; the wrong tax rate means lost profits.
IV. Costs Are Not Isolated: Tariff Stacking and Subtle Shifts in Trade Flows
The 20% tariff is not the only cost increment. Since 2026, domestic chemical raw materials have been in a price hike cycle, with several categories such as rubber compounds, silicone sealants, and organic solvents facing tight upstream supply. The rise in export tariffs and the upward trend in domestic procurement costs create a two-way squeeze, rendering previous quotes based on old tax rates obsolete.
It is worth noting that Brazil's tariff protection is changing the trade flows of related chemicals. A typical example is polyethylene: due to Brazil's anti-dumping measures against US polyethylene, China's polyethylene exports to Brazil surged by 914% in the first half of 2026. This shows that when a certain supply source is blocked by tariffs or trade remedies, the share of alternative sources will quickly fill the gap. For Chinese companies, this is both an opportunity and a sign of dynamic changes in the competitive landscape—the role that fills the void today may face new barriers tomorrow due to domestic industry recovery or policy adjustments.
V. From Inquiry to Customs Clearance: Five Crucial Verification Actions to Front-Load
First, lock down the NCM code and product grade at the quotation stage. Do not wait until the order is confirmed to verify the tax code. For products on the list, first confirm whether their NCM code is covered by Resolutions 963/969, and then check item by item whether the product parameters meet any possible low-tax-rate conditions. The 20% tariff must be included in the CIF quotation cost model, rather than being treated as an "after-the-fact discovery" extra expense.
Second, make the document description a "manual" for the tax rate. The product description on the commercial invoice and Proforma Invoice (PI) cannot stop at the product name. Purity, use, and key parameters (such as iron content, viscosity index, medical-grade certification) must precisely correspond to the exemption clauses. The Brazilian Siscomex system is increasingly strict in verifying NCM codes and declaration information; broad or incorrect descriptions will directly trigger the highest tax bracket or even lead to customs clearance rejection.
Third, embed a linkage price adjustment mechanism for tariffs and raw materials into the contract. This tariff is valid for 12 months and is a temporary measure, with the possibility of extension, adjustment, or cancellation later. For long-term orders, the contract should clearly stipulate how the price will be adjusted when the tariff rate or main raw material costs fluctuate beyond an agreed threshold. This protects both your profit and establishes transparent expectations with customers.
Fourth, stratify Brazilian customers by risk and simultaneously cultivate alternative markets. The 20% tariff will significantly increase customers' landed costs, and some price-sensitive buyers may turn to local suppliers or other sources. While maintaining core customers in the Brazilian market, consciously evaluate procurement demand in Southeast Asia, the Middle East, and Central Asia to avoid excessive concentration of orders in a single high-tariff market.
Fifth, maintain the bottom line of declaration compliance. Brazil customs' digital verification capabilities are improving, and practices such as undervaluing goods or misclassification face high fines and cargo detention risks. With tariff costs already clear, compliant declaration is the only sustainable choice.
Conclusion
Brazil's round of chemical tariff adjustments may appear as a 20% cost shock on the surface, but at a deeper level, it is a screening process for export enterprises' documentation capabilities and compliance precision. Companies that can accurately match grade parameters and incorporate tax rates into their quotation models at the inquiry stage can still find room in the Brazilian market; those that rely on broad declarations and after-the-fact calculations will be gradually squeezed out in this adjustment. The 12-month validity period is both a window and an exam—the answer lies not in the tariff itself, but in how far companies can front-load their compliance actions.