Crop-Top Tax Offers Bit of Relief to Struggling Brazil Retailers

A long-awaited import tax on purchases up to $50 will offer short-term relief to Brazil’s battered retailers as they stumble over longer-term hurdles.

The bill approved in Brazil’s lower house Wednesday, which slaps a 20% levy on low-cost imports, is meant to contain growing competition from Asian fast-fashion players Shein Group Ltd., Sea Ltd.’s Shopee and upstart Chinese app Temu as they expand in Latin America’s biggest economy. It will take immediate effect once it receives a presidential signature.

It’s known in Brazil as the taxação das blusinhas, or crop-top tax, in a nod to the cheaper, ...