News Latin America

Saturday 18 August 2018

Brazil will take 'all necessary actions' after US steel tariff hike

Steel tariffs have been confirmed by US President Donald Trump (Ben Wright/PA)
Steel tariffs have been confirmed by US President Donald Trump (Ben Wright/PA)

Bruno Federowski and Anthony Boadle

Brazil, the second largest steel supplier to the United States, said on Thursday it would take "all necessary actions" in bilateral and multilateral forums to preserve its interests after the imposition of US tariffs on steel and aluminum imports.

The measures will strongly hamper Brazilian exports and are incompatible with US obligations toward the World Trade Organization, the country's Foreign and Trade Ministries said in a joint statement.

"Brazil reaffirms that it will resort to all necessary actions, bilateral and multilateral, to preserve its rights and interests," the statement added.

A senior Foreign Ministry official said U.S. President Donald Trump's "unprecedented" decision had put trade relations between the United States and Brazil in "unchartered waters" that could even lead to retaliation by the Brazilian government.

"Nothing is off the table," said the official, who asked not to be identified because of the sensitivity of the matter.

The tariffs will potentially have a "severe impact" on Brazilian steel exports to the United States, which are mainly semi-finished products that make up 13pc of US steel imports, the official said.

"All suppliers will be affected and we do not know if the Brazilian companies will be able to export anymore to the United States or compete, with such tariffs," he said.

The Brazilian government will have to examine closely what the U.S. measures actually involve because, he said, Trump's address was very general and aimed at the US public, but appeared to allow for voluntary export restrictions and other concessions that would avoid the application of tariffs.

The Brazilian steel industry association called the tariffs an "extreme" measure that would place Brazil in a vulnerable situation to defend itself from the current world oversupply that will be increased by Trump's decision.

The country's main industry lobby, the CNI, said in a statement that Brazil should resort to the World Trade Organization and if it wins it case, use its right to retaliate.

The tariffs will hit $3bn in Brazilian exports of steel and aluminum, the CNI said.

Reuters

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