Latin American countries are calling on the US to scrap the new tariffs

Several Latin American countries have stated that they are actively combating the import of goods produced using forced labour, and have called on Donald Trump’s administration to exempt them from new tariffs ranging from 10% to 12.5%. The US plans to impose these tariffs as a penalty for allegedly lax controls in this area. This is according to Reuters.

During public hearings on a proposal by the Office of the US Trade Representative (USTR) to impose tariffs on 59 countries and the European Union, representatives from Mexico, Peru, Guatemala and Ecuador rejected accusations of inaction. They emphasised that they have existing legislation and clear mechanisms in place to combat forced labour within their supply chains.

In particular, Mexico’s Deputy Minister of Economy, Ernesto Acevedo Fernández, described the additional 10% tariff as an unjustified punishment for thousands of law-abiding Mexican companies, noting that there is no evidence of goods produced using forced labour entering the US via Mexico. At the same time, the USTR’s proposal provides for an exemption from tariffs for those Mexican goods that meet the requirements of the USMCA trilateral trade agreement. Peru’s Director of Trade Negotiations, José Luis Castillo Mezarina, also called for his country to be excluded from the list, as no harm to US trade had been proven.

Overall, the three-day hearings form part of the Trump administration’s legal process regarding the imposition of punitive tariffs under Section 301. However, analysts view these actions as an attempt to replace the 10% temporary global tariff, which was introduced in February under emergency legislation but overturned by the US Supreme Court. These provisional duties are due to expire on 24 July. The Democratic attorneys-general of 22 states have already spoken out against the new restrictions, calling them an abuse of power.

At the same time, US steelmakers and industry associations are calling for imported pig iron, which is essential for electric arc furnaces, to be exempted from the tariffs. As this material cannot be sourced from domestic integrated producers such as U.S. Steel and Cleveland-Cliffs, the new restrictions will lead to a significant increase in costs for Nucor and Steel Dynamics. According to Brandon Farris, vice-president of the Steel Manufacturers Association, without this exemption, the combined tariff on pig iron from Brazil (the main supplier) could reach 37.5%, which would put most US steelmakers at a disadvantage.

The USTR is expected to consider all comments received in detail before making a final decision on the imposition of tariffs and the approval of the list of exemptions.

As reported by GMK Center, Brazil is actively negotiating with the US Trade Representative (USTR) to secure an exemption from additional duties for Brazilian pig iron. It is likely that Brazilian pig iron will be subject to import duties in the US, as the US side does not appear to be interested in reaching an agreement. The US authorities are expected to make a decision by 15 July.