Trade Cases

Brazil Considering Section 232 Concessions

Written by Sandy Williams

April 2, 2018

Brazil is one of seven countries granted a temporary retrieve from Section 232 tariffs on steel and aluminum. If the 25 percent tariff is imposed on the Brazilian steel industry, it would impact 13 percent of the nation’s steel exports and lead to losses estimated at $350 million annually, according to a new study by the Institute for Applied Economic Research. In 2017, Brazil exported approximately $2.6 billion of steel to the U.S., 33 percent of its total steel exports.

Last week, it was reported that U.S. negotiators proposed measures for Brazil to consider in return for permanent exemption from the tariffs. They included:

  • Reduce tariff and quota limits on imports of ethanol. Currently, Brazil charges a 20 percent tariff on ethanol imports above 150 million metric tons per quarter. The tariff is designed to protect Brazilian farmers from foreign competition.
  • Finalize the Open Skies deal. Open Skies is an agreement that would allow unlimited commercial flights between Brazil’s LATAM Airlines Group and U.S.-based American Airlines. The Brazilian Senate approved the agreement on March 7, sending it on to President Michel Temer for signature.
  • Defend against Chinese circumvention. U.S. negotiators request that Brazil take measures to prevent China from circumventing the U.S. tariffs though shipments of steel and aluminum through Brazil’s borders.

In return, the United States said it will support Brazil’s effort to join the Organization for Economic Cooperation and Development.

Sandy Williams

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