November 29, 2022

US removes import surcharge on finished steel from Brazil

WASHINGTON, United States (FOLHAPRESS) – The United States has eliminated additional tariffs on hot-rolled steel imports from Brazil that have been in effect since 2016. The move was taken last Friday (21) by the US International Trade Commission (USITC). Summary in English) and was announced this Thursday (27) by the Ministry of External Affairs.

The decision adds to another decision announced by the US government in July, which eliminated additional tariffs on imports of cold-rolled steel. From January to September of this year, rolled steel production corresponded to 69.6% of all Brazilian steel production, according to data from Instituto Aço Brasil, an organization representing companies in the sector.

Hot-rolled steel is subjected to temperatures of about 1,000 degrees Celsius, making it more flexible and cheaper than cold-rolled steel, which is ugly at room temperature and generally more expensive.

In October 2016, the United States imposed an additional duty of 45.58% on imports of Brazilian products – 34.3% countervailing duties and 11.3% countermeasures. The move was the result of an investigation by the Barack Obama administration that pointed to Brazil providing illegal subsidies in international trade to companies in the Usiminas and CSN sectors. At the time Michel Temer’s government (MDB) appealed to the World Trade Organization, but the US maintained the additional tariffs.

In the initial package, products from Australia, Japan, the Netherlands, Russia, South Korea, Turkey and the United Kingdom are also restricted. The cancellation of the surcharge, which has just been announced, will only affect Brazil, as it is already in force in other countries.

“The imposition of anti-dumping duties and countervailing measures on imports of hot-rolled steel from Brazil will not lead to a continuation or recurrence of material injury in the foreseeable future,” the USITC said in a statement. “Existing tariffs on imports of this product from Brazil will be abolished.”

The surcharge, which was imposed in 2016, is not the surcharge created in 2018 by the Republican administration of Donald Trump, amid a trade war against China, which imposed a 25% tariff on imported metal and is still in place. Brazil, like other countries, has this duty-free steel export quota, but the country is still suggesting that the limit be increased or abolished – or that it pays a lower tariff.

The Brazilian mission abroad argues that the surcharges imposed during the Trump administration are actually a hindrance to the US economy, as the material is handled in Brazil with metallurgical coal imported from the US. Later, Brazilian steel still serves as a raw material for American industry, protecting the Brazilian embassy. For example, this request was made by Ambassador Nestor Forster this Wednesday (26) at the annual meeting of the Pan American Association of Philadelphia, which brings together representatives of regional countries.

According to Idamaratti, Brazil exported US$9.3 billion (R$ 49.27 billion) in steel products in 2021, more than half of which (US$5.1 billion) was sent to the United States.

In a statement, Instituto Aço Brasil said it “considers this initiative an appropriate move to allow the market to reopen.”

“Access to the US market imposes an even stronger restriction on Brazilian exports of these products,” the company says, since, due to the Trump administration’s sanctions, the limit on Brazilian exports today stands at 130,000 tons. “These limits are considered low compared to historically enforced levels because, for their establishment, calculations of average exports were carried out by the US government, which took into account the periods when the restrictions were already in place.”