US suspended aluminum and steel tariffs for Brazil and other allies

US Trade Representative Robert Lighthizer this Thursday at the Senate Finance Committee (Kevin Lamarque - Reuters)

Some of the United States’ closest trading partners will receive a temporary reprieve from tariffs on aluminum and steel imports, the top US trade official said Thursday, a day before the measures were set to begin. The curbs were expected to be imposed on Friday (23rd March), two weeks after Trump’s signature.

The decision was sure to relieve anxious U.S. partners, even as it raised questions about whether the tariffs would be able to protect US metal industries. Brazil, Argentina, the European Union, South Korea and Australia are on the list US Trade Representative Robert Lighthizer announced at a Senate hearing. Canada and Mexico already had been exempted.

World leaders had subjected Washington to a furious lobbying effort to remove the tariff, announced by President Trump earlier this month, warning of a trade war and saying that they did not see why long-standing military allies should face the import taxes on national security grounds, the professed basis for Trump’s action.

“The idea that the president has, is that based on a certain set of criteria, that some countries should get out,” Lighthizer told the Senate hearing. “What he has decided to do is to pause the imposition of the tariffs with respect to those countries.”

Lighthizer said Wednesday that he expected that negotiations about permanent exemptions to the tariffs would be resolved by the end of April, creating pressure on the countries to reach a deal with Washington on measures that would satisfy Trump’s desire to improve their trade relationships with the United States.

Following the exemptions, the countries that will be hit hardest when the steel tariffs take effect Friday will be Russia, Taiwan and Turkey.

Temer: US will start “negotiations” with Brazil

In an announcement made Wednesday (21st March), Brazilian President Michel Temer said the US would start negotiations with Brazil over the new import tariffs on steel and aluminum. While talking about the measure, unveiled in a note by the US government just at that moment, Temer said the new tariff will not be introduced before negotiations are brought to an end.

“I’m looking at a declaration by the White House saying that Brazil is one of the countries with which negotiations are to begin with a view to waiving import tariffs on steel and aluminum. The new tariffs, the message from the White House says, will not apply until conversations are held on the topic. Good news,” the Brazilian President said, during a meeting with the Economic and Social Development Council (CDES).

On Tuesday, Temer talked to a representative from Brazil’s steel-producing industry. In the conversation, the President availed himself of arguments to convince US President Donald Trump to exempt Brazil from the new tariff.

Sources: Agência Brasil, Reuters, The Washington Post

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Brazil: Temer says meat fraud scheme impacts small part of industry; China temporarily bars Brazilian meat

Photo: Presidência da República/Beto Barata

In a statement made Monday (Mar. 20), the Brazilian President Michel Temer said the issues uncovered at meat processing plants by the Federal Police as part of Operation “Weak Flesh” affect only a small part of the sector. “Agribusiness is of the utmost importance to us and must not lose its value on account of a small core, something that will shrink in size: it can be investigated, monitored, and punished whenever necessary. But we must not compromise the whole system we've been putting together over the years. We've been exporting to over 150 countries,” the president told an audience of investors at the headquarters of the American Chamber of Commerce, in São Paulo.

The crackdown was launched last Friday (17) and targeted some of the country's biggest food giants, like JBS, BRF, and Peccin, accused of committing a number of frauds to conceal the use of expired or low-quality material in food production.

Temer noted that the number of public officials implicated (33) is small compared to all 11 thousand officials in the Ministry of Agriculture. “Our sanitary assessment systems here in Brazil are extremely rigorous,” he stressed. The officials are being accused of pocketing bribes in exchange for releasing products that did not comply with the regulations. He went on to say that the number of plants under suspicion (21) is small, taking into consideration the whole of the sector, which includes over 4.8 thousand establishments.

The president further mentioned the several meetings he held in recent days both to become acquainted with the topic and to reassure the countries buying Brazilian foods. “I've been to a number of meetings in Brasília, first with the ministers from the areas involved in the issue, then with the associations of meat producers of all kinds, as well as the ambassadors from the countries importing Brazilian meat. We ended up in a fraternal atmosphere last night, eating barbecue with all the representatives of the countries in attendance,” he said.

China temporarily bars Brazilian meat from entry

China suspended the entry of Brazilian meat in the country until Brazil provides clarification regarding Operation “Weak Flesh”.

In a note, the Brazilian Ministry of Agriculture, Livestock, and Supply announced it will provide all clarifications to the Chinese as quickly as possible. “Until it received the information, China will not allow the meat from Brazil to land. Minister [Blairo Maggi] said he will hold a video conference with Chinese authorities to provide the clarifications,” the statement says.

According to news agency Xinhua, Brazil's exports to China nearly doubled in the first two months compared to the same period in 2016. In January and February, the exports raised $6.246 billion, mostly through the sale of oil and iron, soy, wood pulp, and beef. The value of Brazil's exports to China leaped 94.3%, driven by an increase in the price of raw materials like oil and iron.

On Monday morning, a ruling from the ministry removed federal superintendents for agriculture, livestock, and supply Gil Bueno de Magalhães in Paraná, and Júlio César Carneiro in Goiás. On Friday, after the launch of the Weak Flesh probe by the Federal Police, the government had announced the ouster of 33 government officials suspected of being involved in the irregularities being investigated.

The investigators believe that the processing plants implicated in the scheme “masked” spoiled meat and repackaged them to sell them. The companies bribed government-appointed inspectors in exchange for allowing the products to be traded without due inspection.

Chile and South Korea

China's was the only suspension confirmed by the Brazilian Ministry of Agriculture. However, according to news agency DPA, Chile's Agriculture Minister Carlos Furche announced that the country barred Brazilian meat from entry until further clarifications on the scope of the scheme are provided.

By contrast, South Korea overturned its decision to bar Brazilian meat imports. In his opening speech at the 2017 Latin American Cities Conference, in Brasília, Temer further said he is not familiar with all the details concerning the current position of the South Korean government, but he believes it came as a reaction to the clarifications provided by the Brazilian authorities.

The president noted he has already ordered the creation of a task force to further probe into the irregularities and mentioned the measures adopted to prevent the economy from suffering any more harm. “The officials [charged] were ousted by the minister of agriculture, Blairo Maggi, yesterday”.

Source: Agência Brasil

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