The US Section 232 import tariffs will cause serious losses to Brazilian exports, and will have a significant negative effect on bilateral trade flows and on trade and investment relations between the two countries, according to Brazilian foreign trade ministry MDIC.
The trade flows have been largely favorable to the United States over the past 10 years, the ministry added.
MDIC, along with national steel institute Aço Brasil, looked at ways to avoid being included in any measures related to the Section 232 investigation into steel and aluminium imports. It told the US government and other relevant actors in that country that Brazil’s products do not pose a threat to US commercial or security interests.
“The US measures will undermine continuing efforts at the Global Steel Forum - to which the US is a party - to address the issue of overcapacity in the steel sector, [which is] the major cause of the problems faced by the industry,” MDIC minister Marcos Jorge said.
“The measures restricting imports of steel and aluminium are incompatible with US obligations [to] the World Trade Organization,” he added.
While expressing a preference for dialogue and partnership, Brazil reaffirms that it will take all necessary steps, both bilaterally and multilaterally, to preserve its rights and interests, according to the MDIC.
On Thursday March 8, US President Donald Trump confirmed his previously announced tariffs of 25% on steel imports and 10% on aluminium imports into the US.
After the announcement of these measures, Aço Brasil said that the Brazilian government would decide whether to “immediately file an appeal” with the US government against its “extreme” decision to impose a 25% duty on steel imports.
Mercosul, Canada deal
On Friday March 9, Brazil, along with its partners in the Mercosul trading bloc, held a meeting in Paraguay to celebrate the initiation of negotiations for a free trade agreement with Canada, according to MDIC.
Mercosul is the customs union and trading bloc that covers most South American countries.
MDIC’s Jorge considered the timing for the start of these talks to be “very strategic,” and underscored Brazil’s determination to open up and participate in international trade.
The dialogue between Mercosul members and Canada came after the announcement of the US import tariffs on Brazil-origin steel and aluminium products.
“While some international players are closing [their markets], Brazil and the Mercosul partners have demonstrated that the integration of our markets into global value chains is fundamental,” Jorge said. “The negotiation of new agreements, like this with Canada, is an important step.”