The "blouse tax" has come to an end. And it has already generated a war with the main national fashion retailers. A provisional measure signed on the evening of Tuesday, May 12, by President Luiz Inácio Lula da Silva revoked the collection of the 20% import tax on international purchases of up to US$ 50.

Taken less than six months before the presidential election, the government claims the measure aims to alleviate pressure on low-income consumers and stimulate consumption in the country, precisely in a challenging macroeconomic scenario. But it was Lula's own government that established the levy, which came into effect in August 2024.

The financial market reacted negatively to the announcement, and the impact was directly felt in the shares of companies in the sector. Around 12:30 PM, C&A shares on the B3 stock exchange had accumulated a 1% loss. At the same time, Riachuelo shares were down 0.8%, and Renner shares were down 0.7%.

Analysts at BTG Pactual believe that the repeal of the tax significantly reopens the debate about the tax and competitive asymmetry between local fashion retail chains and Asian platforms such as Shopee, Shein, and Temu.

Before the tax was implemented, shipments of low-value products from abroad exceeded 18 million per month entering Brazil. As soon as the tax came into effect, the volume fell to around 11 million, still in 2024. But the platforms recovered, and sales reached 15 million per month.

“We believe that removing the fee could accelerate the penetration of these platforms again, especially in the clothing, accessories, beauty, and home goods segments,” says a report signed by analysts Luiz Guanais, Yan Cesquim, and Beatriz Cendon.

“Price differences may widen again, despite operational improvements by local retailers. From a pricing perspective, reversing the measure likely restores some of the structural advantage historically enjoyed by cross-border players,” adds the BTG Pactual document.

In the bank's view, even though these Asian platforms face challenges in Brazil, mainly related to logistical complexity, exchange rate volatility, and delivery time, national companies will be more exposed to middle- and low-income consumers, due to tougher competition and less pricing power.

According to analysts, this dynamic will remain relevant precisely for Renner, C&A, and Riachuelo. Recent research by BTG shows that, in a basket of eight products, Shein sells 6% cheaper than Riachuelo, 10% less than Renner, and 13% below the price of C&A.

On the other hand, the difference decreased over the months, due to more focused initiatives from Brazilian companies, such as in supply, inventory allocation, and pricing structure.

"In other words, although the competitive environment may intensify again, local players appear to be operationally better prepared than they were during the peak of disruption in 2023–2024," the bank's report states.

The main debate now, according to analysts, is whether local players will be able to sustain the gains in gross margin discipline and inventory quality, while facing renewed pressure on prices and market share, precisely in a more aggressive environment.

The Brazilian Textile and Apparel Industry Association (Abit) expressed concern about the measure and repudiated the decision announced by the federal government. According to the organization, the revocation penalizes companies that invest and employ workers in Brazil.

“Instead of strengthening national industry, formal retail, jobs, and tax revenue, the measure further widens the tax and regulatory inequality between Brazilian companies and international platforms,” says Abit. “This is unequal treatment, harmful to national industry and retail.”

On the other hand, the Brazilian Association of Mobility and Technology (Amobitec), which counts Shein and Alibaba Group among its members, celebrated the repeal of the t-shirt tax. According to the organization, the end of the charge contributes to the "democratization of consumption."

“As several studies have shown, the taxation was extremely regressive, reducing the purchasing power mainly of classes C, D, and E. Furthermore, the “blouse tax” did not fulfill its promise of generating more jobs or increasing income in the national retail sector,” states Amobitec.

In 2026, Renner's shares will have appreciated by 1.4%. C&A, on the other hand, will register a drop of 12.7% during the same period, and Riachuelo, a depreciation of 10%.

Renner's market value is R$ 13.7 billion. C&A is worth R$ 3.3 billion, and Riachuelo, R$ 4.2 billion.