Brazil is expected to propose trade quotas as an alternative to the 25% tariffs imposed by the United States on steel and aluminum, according to Vice President Geraldo Alckmin.
The government of President Luiz Inácio Lula da Silva has not yet discussed the issue with the Trump administration since the U.S. leader announced the 25% tariffs on all metal imports on February 11. However, the quotas that limit the amount of steel Brazil exports to the U.S. each year proved to be a “good solution” during previous trade disputes and may be on the table again, Alckmin told reporters in Brasília.
This will not be the first time the two countries negotiate on the subject. After Trump imposed similar tariffs during his first term, the U.S. and Brazil agreed to export quotas of 3.5 million tons of plates and semi-finished products and 687,000 tons of rolled products. Trump eventually granted exemptions from the tariffs to Brazil and other nations.
At that time, Brazilian companies were already subject to annual import quotas by the U.S. In fact, only 18% of the products going to the U.S. pay the full 25% rate.
Brazil is the third-largest supplier of steel to the U.S., according to the U.S. Census Bureau. The Aço Brasil institute, an industry group representing Brazilian steelmakers, said it hopes the governments will reach a similar agreement to that of Trump’s first term.
Sources: Reuters and Bloomberg