United States President Donald Trump has decided not to go ahead with tariffs on steel products from Brazil under Section 232, Brazilian President Jair Bolsonaro said on Friday December 20 following a call to his US counterpart.
“I spoke today with President Donald Trump and, after some exchanges, he decided not to go ahead with his intention of [imposing] tariffs on our steel and aluminium,” Bolsonaro wrote on his social media Facebook page on Friday night. “Our trade and friendship relations are stronger every day.”
Trump had written on social media platform Twitter on December 2 that the tariff exemption for Brazil and Argentina would be over “immediately” amid rapid currency depreciation.
“Brazil and Argentina have been presiding over a massive devaluation of their currencies, which is not good for our farmers. Therefore, effective immediately, I will restore the tariffs on all steel and aluminium,” Trump tweeted.
An executive order or any effective move, however, did not follow.
Trump confirmed on Twitter that Bolsonaro called him on Friday, but he did not mention the tariffs. “We discussed many subjects including trade. The relationship between the United States and Brazil has never been stronger,” the US president said.
The US imposed tariffs of 25% on steel imports and 10% on aluminium under Section 232 on March 23, 2018. Brazil and Argentina were exempted in May that year and granted a quota under which they could ship to the US without being subject to the tariffs.
While steel from Brazil and overall products from Argentina were under the quota system, the Brazilian aluminium industry chose to keep exporting to the US and pay the 10% tariff.
It was not clear whether the tariffs over Argentinian products were still going to be enforced.
Under the quota, Brazil is able to export around 4.2 million tonnes of steel products to the US, with 3.5 million tonnes being semi-finished steel. Most of the exports are slab.
The initial tariff renewal was announced amid industry negotiations for February slab shipments to the US and effectively halted talks. As the intention did not become official, market activity soon picked up, and some deals settled in the past two weeks.
Fastmarkets assessed the price for steel slab export, fob main port Brazil at $395-405 per tonne on Friday, stable from a week before but up from $370-395 per tonne on December 6.