Trade Cases
Steel Quotas in the Cards for Brazil?
Written by Sandy Williams
April 26, 2018
Steel quotas may be in the cards for Brazil as it attempts to negotiate its way into a permanent exemption from the 25 percent steel tariffs scheduled to go into effect on May 1.
U.S. Commerce Secretary Wilbur Ross reportedly told Brazil’s Minister of Affairs that the quickest way to win exemptions would be to agree to voluntary restrictions on exports and the establishment of quotas.
Marco Polo De Mello Lopes, president of the Brazilian Steel Institute Aço Brasil, said that the U.S. appears to be signaling it will impose quotas on particular products, which would require the steel sector to set limits for each company.
Most of Brazil’s imports to the U.S. are semifinished steel products such as billets and slabs. According to the U.S. International Trade Administration, the U.S. imported 50 percent of its semi-finished steel products from Brazil in 2017, a total of 3.8 million metric tons.
“The U.S. is not self-sufficient in slab,” said Lopes. Curtailing exports will hurt those U.S. steel producers who depend on Brazilian slab shipments.
Brazil’s steel sector is expecting an 8.6 percent increase in production this year. Domestic sales are forecast to increase 6.6 percent and exports 10.7 percent.
“Depending on the outcome of the negotiations with the United States, obviously this number can have a very large impact,” said Alexandre de Campos Lyra, chairman of Aço Brasil. “One third of the exports are destined for the U.S. market.”
The Institute expressed concern about safeguard measures implemented by the European Union to protect its domestic steel industry from a flood of exports diverted from the United States.
“We are experiencing a monumental turbulence because of the absurd excess of steel capacity in the world,” said Lopes. “All nations are protecting themselves like the United States.”
The Brazilian steel industry is still trying to recover from a severe economic crisis. According to data from the Aço Brasil, industry performance improved in the first quarter of 2018 with domestic sales up 11.4 percent from the same quarter in 2017. Steel production was 8.6 million tons, a 4.9 percent increase from a year ago.
Sandy Williams
Read more from Sandy WilliamsLatest in Trade Cases
Breaking News: Trump’s ‘Liberation Day’ brings 10% baseline tariffs; steel, aluminum, and autos/parts excluded
President Trump’s promised “Liberation Day” has arrived, with a 10% minimum tariff on imports. But there are some very important exceptions: The United States’ USMCA partners, Canada and Mexico, are excluded from the reciprocal tariffs for now. In addition, steel, aluminum, as well as autos and auto parts are excluded from the reciprocal tariffs. That’s […]
Price on Trade: Auto tariffs, auto parts, and Hyundai – a world of rapid changes
Trump's new auto tariffs will apply to passenger vehicles (including sedans, sport utility vehicles, crossover utility vehicles, minivans, and cargo vans), light trucks, and certain automobile parts (including engines and engine parts, transmissions and powertrain parts, and electrical components).
CRU: Canacero urges Mexico-US partnership to fend off Asian steel imports
Victor Cairo, head of Mexico’s steel sector body Canacero and CEO of ArcelorMittal Mexico, says he is confident negotiations between the Mexican and US governments planned for April 2 will lead to the creation of a regional block to substitute imports, especially from Asia.
US chassis makers seek duties on imports from Mexico, Thailand, and Vietnam
Upon the request of US chassis manufacturers, the Commerce Department this week initiated investigations into the alleged dumping and subsidization of chassis imported from Mexico, Thailand, and Vietnam.
European Commission eyes stricter limit on tariff-free steel imports
The European Commmission is reducing the amount of tariff-free foreign steel that can enter the EU.