Trump Enforces Steel Tariffs Impacting Brazil

President Donald Trump announced a 25% tariff on aluminum and steel imports, significantly affecting Brazil, which sends nearly half of its steel exports to the U.S. The new tariffs revoke a prior agreement on steel product quotas. Canada also faced similar tariffs, but Trump retracted an escalated proposal after discussions. The trade developments have caused market volatility in the U.S.

On a significant day in Washington, U.S. President Donald Trump announced the enforcement of a 25% tariff on all unauthorized imports of aluminum and steel, effective March 12, thereby impacting Brazilian exporters extensively. Approximately 50% of Brazil’s steel exports are directed to the United States. Despite this critical development, the Brazilian Ministry of Development, Industry, Trade, and Services (MDIC) refrained from making any immediate comments regarding the tariff implementation.

In addressing the tariffs, White House spokesperson Kush Desai confirmed that the new steel and aluminum tariffs would be applied uniformly, including to Canada, without any exceptions. The introduction of these tariffs effectively nullifies the existing 2018 agreement between Brazil and the U.S., which had allowed Brazil to export specific quotas of steel to the American market.

The previously established agreement permitted Brazil to send 3.5 million tonnes of slabs and semi-finished products, along with 687,000 tonnes of rolled steel to the U.S. Following the imposition of the hard quota system, Instituto Aço Brasil reported full compliance with the outlined conditions by Brazilian steel manufacturers.

In 2024, the U.S. imported 5.6 million tonnes of steel slabs, of which Brazil supplied 3.4 million tonnes to satisfy domestic demand. Moreover, last year’s figures indicated that the U.S. accounted for nearly 45% of Brazil’s iron and steel product exports. With respect to aluminum, the previously established 10% tariff increased to 25%, though Brazilian products constitute less than 1% of total U.S. aluminum imports. However, the U.S. represents approximately 17% of Brazil’s aluminum exports, valued at $267 million in 2024.

As the trade landscape evolved, President Trump rescinded an initial plan to elevate Canadian metal duties to 50%. This change occurred shortly after Canadian officials indicated intentions to lift their own tariffs on energy exports to the U.S., addressing some of the concerns leading to Trump’s proposed increases. This mutual concession underscores a complex and changing trade relationship between the U.S. and Canada.

The Canadian province of Ontario’s Premier Doug Ford announced that he would suspend the recently imposed 25% tariff following productive discussions with U.S. Commerce Secretary Howard Lutnick. A subsequent meeting in Washington is scheduled to address lingering trade tensions.

In an emotional communication, Trump declared on his Truth Social platform the directive for the additional 25% tariff on steel and aluminum imports from Canada, marking a distinct escalation in trade matters. This unfolding dispute has led to fluctuations on Wall Street, particularly influencing the S&P 500 index despite a significant decline during the previous trading day.

The implementation of Trump’s steel and aluminum tariffs represents a critical shift in U.S.-Brazil trade relations, particularly impacting Brazilian metal exports. The nullification of the 2018 agreement poses substantial challenges for Brazilian exporters, who have historically relied on the U.S. market. As the U.S. navigates its trade policy with other nations, including Canada, the outcomes of these tariff changes will continue to reverberate through global markets and trade patterns.

Original Source: valorinternational.globo.com