A change that is happening may be underestimated by many. When the whole world is “increasing prices”

Luiz Inácio Lula da Silva recently signed a presidential decree, announcing: The import duties on cross - border packages under $50 are cancelled.

This means that the tax burden originally targeting low - price cross - border goods has been officially removed. And just recently - in August 2024, Brazil had just introduced the “cheap clothing tax” policy: a 20% import duty on packages under $50.

The logic at that time was very clear: to protect domestic industries and increase fiscal revenue. But now, the policy has reversed. The reason is also equally realistic - consumers are starting to “can't bear it anymore”.

If you only look at the policy changes, it is easy to misjudge it as a “trade attitude change”. But when you put the timeline and background together, you will find that the essence is: cost out of control.

In the past year, several key variables have risen simultaneously:

Rising oil prices → increasing transportation costs

Rising freight → fully transmitted in the logistics end

Rising raw materials → moving up manufacturing costs

Rising terminal goods prices → pressure on the consumer side

When these factors are superimposed together, and then superimposed with “cross - border duties”, what will happen? The answer is very straightforward: in the end, all of them will be transferred to consumers. And this is precisely the core reason why the policy has begun to loosen.

The policies of many countries on cross - border e - commerce are essentially caught between two ends: on one hand, domestic industry protection; on the other hand, consumer price pressure.

But in the inflation cycle, this balance will obviously tilt. Because: consumers' perception is more direct than industry protection. Especially in the context of an upcoming election cycle - “cheap goods” are often more convincing than “industry logic”.

This is also why: Brazil's cancellation of duties on low - price packages this time is essentially not only an economic decision, but also a political decision.

If you look at the industry from a perspective, you will see a more interesting trend: in the “overall price increase” environment - the attractiveness of Chinese goods is actually rising.

The reason is simple: in the same price increase environment, who has more price advantage, who has more demand elasticity.

And the core competitiveness of Chinese cross - border goods has never been “high - end premium”, but high - cost - performance supply capacity.

So you will see a seemingly contradictory result: costs are rising, duties are increasing (in some countries). But demand has not disappeared, but is even more “rigid”.

Brazil's move is likely not an isolated case. When the whole world faces the same problem - “inflation + consumer pressure”. Some policies that had previously been “tightened” on cross - border e - commerce may change: tax reduction, adjustment of the starting point, or choosing “selective relaxation”.

Because the cost of continuing to increase is getting higher and higher: not borne by enterprises, but by voters.

In the past few years, cross - border e - commerce has been facing a continuously tightening policy environment. But now, a subtle turning point is emerging: when costs are rising across the board, duties are no longer variables that can be infinitely superimposed. Brazil is just the first country to “step on the brake”.

Will more countries follow up next? Uncertain. But what is certain is that the room for duty increase is being compressed by reality.

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Source: Cross - border E - commerce Logistics Baixiaosheng