Brazil has raised taxes on motorcycles, air conditioners and microwave ovens in its latest move to cut imports and stem a prolonged contraction in the country’s manufacturing sector.

The industrial production tax on motorcycles made outside the Amazonian tax-free zone of Manaus, the centre of most of the country’s two-wheeler production, was raised to 35 per cent from 20 per cent.

The measure, which applies to domestic and foreign producers alike, follows a series of similar steps to protect industry and sparked a heated response from importers.

“There is a strong lobby urging the Brazilian government to control imports and raise taxes,” said Ivan Ramalho, president of Abece, an industry group representing international trading companies.

“The government should resist this lobby.”

Brazil is facing growing allegations of protectionism after moves to restrict imports of cars from Mexico and to raise taxes on imported vehicles. The government counters that it is only protecting itself from dumping by foreign manufacturers, which are suffering from excess inventories amid a slowdown in developed markets. – (The Financial Times Limited)