Brazil plans to negotiate US steel tariffs

Brazilian Finance Minister Henrique Meirelles said that the country is to consider talks with the US on the 25% tariffs on imported steel, a measure signed Thursday (Mar. 8) by President Donald Trump.

“The Government signed that; it should be in effect in 15 days, but they’re saying they’re open to negotiation. We just have to know what sort of negotiation this is; what they’re willing to negotiate. The issue will be considered bearing in mind what Brazil has to win or lose,” Meirelles said in New York, where he is taking part in an event aimed at drawing foreign investment to Brazil.

In his view, the decision made by the US Government is detrimental to all parties involved. “It benefits steel production and protects the employment of a group of workers in steel-producing companies. But it’s harmful, it takes the jobs of industrial companies using steel or aluminum; companies that lower their international competitiveness for having more expensive supplies.”

The Brazilian Government released a note last Thursday (8) stating that the decision by the US Government should cause “significant losses” in Brazil, and make an impact on “trade and investment ties between the two nations.”

Altogether, 32% of the steel exported by Brazil is bound for the US, which makes Brazil second only to Canada in steel exports to the US. In 2017 alone, 4.7 million tons of Brazilian steel were shipped to the US, which totaled $2.6 billion in revenues.

Trump's tariffs could ricochet on US coal country

Metallurgical coal — or “met coal” — is low-ash, low-sulfur coal that’s used to produce coke, an essential fuel for steel-making.

 Demand for met coal is tied to the demand for steel. It’s also an American export and a symbol President Donald Trump used often on the campaign trail.

Last week, Brazil reminded US officials that it’s the biggest buyer of American met coal – about $1 billion worth last year – in a statement expressing concerns over the tariffs.

Latin America’s largest economy imported nearly 5.2 million tons of US met coal through September of last year – about 1.3 million more than the next highest consumer, Japan, according to the U.S. Energy Information Administration.

The Brazilian statement also pointed out that US and Brazilian steel industries are not competitors, but are integrated and complement each other. “Approximately 80% of Brazilian steel exports are semi-finished products that are used as inputs in the US steel industry. Moreover, Brazil is the largest buyer of metallurgical coal from the United States, chiefly for the manufacture of Brazilian steel for export to the United States” said the note.

Brazil also said it would not rule out retaliating against proposed tariffs. Similarly, a European Union trade leader has threatened to impose tariffs on US made products like steel, cars, orange juice and Kentucky bourbon.

Sources: Agência Brasil, Ministry of Foreign Affairs of Brazil.