Brazil has criticised the new trade barriers imposed by the US and the EU

According to the country’s authorities, such actions do not solve the problem of steel overproduction, but instead provoke an escalation of trade measures

The Brazilian government has strongly criticised recent decisions by the US and the EU to impose new restrictions on imports of steel products. The country’s authorities consider such protectionist measures to be unjustified and harmful to global trade. This was reported by SteelOrbis.

Brazil’s Foreign Minister, Mauro Viera, has sent a 29-page official letter to the US Trade Representative (USTR). In the document, he described the US’s recent decision to impose a 25 per cent tariff on imports of Brazilian pig iron and other steel products as ‘unjustified’.

Viera emphasised that the USTR’s decision is based on a fundamental error and allegations regarding Brazil’s commercial practices, which should not be considered at all under Section 301 of the US Trade Act. In particular, the Brazilian side refuted allegations that the PIX payment system was causing harm to US companies, gave assurances of increased funding to combat illegal deforestation, and rejected accusations of alleged censorship against US technology giants. Furthermore, tariffs on Brazilian steel and pig iron could rise to 37.5 per cent, which would effectively close the US market to these products. This is critical, as Brazilian pig iron currently accounts for over 83 per cent of US steelworks’ requirements. Previously, this product had been exempt from increased tariffs due to its importance to US industry, but this exemption has now been revoked.

At the same time, Brazil’s Ministry of Foreign Affairs (MRE) and Ministry of Industry, Trade and Services (MDIC) issued a joint statement condemning the EU’s unilateral measures to restrict steel imports from Mercosur countries.

It is noted that the new quantitative restrictions and increased tariffs on volumes exceeding the established quotas will restrict access to the European market and will in no way resolve the problem of overcapacity in the global steel industry. The EU has currently set an annual quota of 227,000 tonnes for finished steel products from Brazil, whilst slabs and billets will remain exempt from import duties.

The Brazilian authorities have warned that restricting trade with countries that are not responsible for global overproduction does not solve the problem, but is only likely to provoke an escalation of retaliatory trade defence measures. Brazil plans to actively advocate for multilateral solutions at international forums.

As reported by GMK Center, the European Commission has published an implementing regulation setting out the allocation of tariff quotas for steel imports amongst the EU’s trading partners. Half of the EU’s annual import quota (18.3 million tonnes) is reserved exclusively for partners under free trade agreements. The remaining 9.15 million tonnes will be available to all trading partners without discrimination, including those with a free trade agreement.