Brazil hopes US lifts curbs on steel, aluminum

The Brazilian government still expects that the US does not follow through with the application of restrictions on steel and aluminum in Brazil. The statement was made in a joint note released Wednesday (May 2) by Industry, Foreign Trade, and Services Minister Marco Jorge and Chancellor Aloysio Nunes Ferreira.

“The Brazilian government still expects that the US does not follow through with the application of restrictions, thus preserving the current flow of bilateral trade in the sectors of steel and aluminum. At any rate, [the government] will remain willing to adopt all the necessary actions to preserve its rights and interests in both bilateral and multilateral fields,” the note reads.

On April 30, the White House said it exempted Brazil, Argentina, and Australia from tariffs on steel and aluminum, but the negotiation included quotas for curbing imports.

Negotiations

According to the US government, the pacts with these three countries are early drafts of deals, whose details will be disclosed soon. “In all of these negotiations, the administration is focused on quotas that will restrain imports, prevent transhipments, and protect national security,” the White House is reported to have stated.

The US government also decided to postpone the taxation for EU countries, Mexico, and Canada. The decision was made shortly before the end of the deadline for talks, slated for yesterday (1).

When US President Donald Trump introduced 10% tariffs on aluminum and 25% on steel late in March, he exempted said countries from the curbs until midnight on May 1 in order to provide more leeway to talks on deals with some of the key partners of the US.

The original list of temporarily exempt countries also included South Korea—with which Washington has already reached a definitive deal making Seoul free from the tariffs.

National security

According to the note by the Brazilian ministries, the government made clear in its talks with the US that “the goods from Brazil do not pose a threat to the national security” of that country.

“On the contrary, the industries of both countries are integrated and complement each other. Approximately 80% of Brazilian steel exports are made from semi-finished products, used as supplies by the US steel industry,” the note adds.

 “Brazilian companies are making significant investments in the US and account for a considerable share in production and employment in the US steel sector. At the same time, Brazil is the biggest importer of coking coal of to the US (some $1 billion in 2017), chiefly directed at the Brazilian production of steel exported to that country,” the note says.

Aluminum

As for aluminum, the note goes on, Brazilian exports are limited. “And it has been stressed that, over the last years, the US has had a surplus in its aluminum trade with Brazil. In addition, the Brazilian government highlighted that the industries in the two countries are complimentary, as Brazil provides raw material for the US in this sector,” the text says.

Nonetheless, the note says, on April 26, the US authorities announced their decision to halt talks and immediately bring the previously levied taxes in effect for Brazil, or, alternately, restrictive, unilateral quotas with no possibility for further negotiation.

“Faced with the decision unveiled by the US, its representatives in the aluminum sector have indicated that the alternative least harmful to its interests would be to maintain the 10% initially set,” Ministers Marcos Jorge and Aloysio Nunes Ferreira argued.

In their view, “any restrictive measures that may be adopted will fall exclusively under the responsibility of the US government.” The ministers also stated that “the Brazilian government laments the interruption of the negotiating process and reiterates its openness to build reasonable solutions for both parties.”

*Extra information from news agency EFE