U.S. Impose Quota on Tariff-Free Brazilian Steel

The U.S. government has proposed a quota for tariff-free imports of Brazilian steel, two Brazilian officials who participated in a U.S.-Brazil meeting told Reuters on Thursday, offering to soften trade barriers after tough talk last month. Tariffs on steel (25%) and aluminum (10%) were suspended for Brazil, South Korea, Argentina, Australia and the European Union until April 30, while negotiations for the definitive relinquishment of such surcharges take place. The US is the country that most imports Brazilian steel, meaning the implementation of tariffs could lead the country to lose US$ 1.1 billion on an annual basis.

The quotas would be calculated based on the current amount of steel exports to the United States, the sources said, asking for anonymity because the matter is not yet public. The U.S. proposal is the latest step in Brazil’s efforts to negotiate its way out of newly introduced tariffs on steel and aluminum imports to the United States, part of a protectionist push by U.S. President Donald Trump.

The U.S. import more than 80% of their semi-finished steel products from Brazil. They then transform them into parts that are sold to manufacturers of home appliances and automobiles, among others. It should also be noted that Brazil imports US$ 1 billion in US coal in order to make steel.