By The Rio Times | Created at 2025-03-13 10:53:14 | Updated at 2025-03-13 15:29:42
4 hours ago
The Institute of Applied Economic Research (Ipea) estimates Brazil will lose $1.5 billion in steel exports due to the 25% tariff imposed by the United States.
This new measure, which took effect on March 12, targets all steel and aluminum imports regardless of origin, eliminating previous exemptions. Brazil’s steel industry faces significant consequences from these tariffs.
Ipea projects a 2.19% decrease in local production of ferrous metals and an 11.27% contraction in exports. The country’s steel production could drop by nearly 700,000 tons in 2025, affecting primarily the well-developed Brazilian steel sector.
The United States serves as the primary destination for Brazilian steel exports. Brazil supplied 60.7% of US steel plate import demand in 2024, with the US importing 5.6 million tons of steel plate due to insufficient domestic supply.
Brazilian steel producers exported 3.4 million tons to the American market last year. Despite these challenges, the broader Brazilian economy will experience minimal impact.
Brazil Faces $1.5 Billion Export Loss as Trump’s Steel Tariffs Take Effect. (Photo Internet reproduction)Ipea forecasts only a 0.01% reduction in GDP and a 0.03% decrease in total exports. The country might actually gain $390 million in trade balance due to reduced economic activity leading to fewer imports.
Brazil’s Response to New US Steel Tariffs
The Brazil Steel Institute expressed surprise at the US decision but remains confident about potential dialogue between both governments. They highlighted that the US steel industry depends on Brazilian slabs, with the current trade arrangement benefiting both nations.
The institute also pointed out that in the steel supply chain, the US maintains a $3 billion trade surplus with Brazil. This tariff situation echoes 2018 when Trump first introduced similar measures.
Back then, Brazil eventually secured export quotas instead of tariffs through negotiation. Fernando Ribeiro, coordinator at Ipea, suggests negotiation represents the best strategy for Brazil rather than retaliation.
Brazilian steelmakers already faced domestic challenges before these new tariffs. The sector struggled with rising steel imports from Asian countries throughout 2024, prompting industry calls for increased protection through higher import duties and quotas.
