Brazil and United States discuss reviewing steel quotas

Brazil has initiated the conversation about reviewing the steel quotas that limit the entry of the product into the US market. The Donal Trump administration imposed these restrictions in 2018.

The Brazilian journal Valor found that representatives have been engaging with interlocutors at the United States Trade Representative, the US Department of Commerce, and the Department of State.

Sarquis JB Sarquis, the secretaire of foreign trade and economic affairs at the Ministry of Foreign Affairs, claimed that he was “attentive to the unfolding of the US agreements with the EU and Japan [announced on the 8th], as well as other key economic partners like the UK in regards to finding leeway to ease restrictions on US steel imports”.

According to him, Brazil has stepped up its efforts to “remind the United States that we are an important partner in the steel sector due to the strong links and complementarities between the two countries’ production chains.”

Brazilian steel exports to the US are worth approximately US$ 2.3 billion per year. Out of this amount, 85% is shipped in the form of semi-finished steel, which American steelmakers use as raw material to make the final product. Brazil is by far the biggest supplier of the product to the US, accounting for nearly 60%vof the total US imports in 2020, followed by Mexico with 23.3% and Russia with 5.77%.

Amid trade tensions with China, Trump decided that foreign steel “threaten[ed] national security” and imposed a 25% tariff on steel imports and a 10% tariff on aluminum imports, causing outrage among Washington allies who saw the move as retaliation.

In October last year, under the presidency of Joe Biden, the US and the EU reached an agreement whereby Washington maintained the tariffs but exempted a certain amount, allowing European companies to regain a certain presence in America by reselling at a historical amount for a quota.

Earlier this week, the US announced an agreement with Japan under which tariffs will be eliminated from April onwards, respecting an import quota of 1.25 million tonnes of Japanese steel. However, this volume is still less than the 1.8 million tonnes exported by Japan in 2018.

Brazil’s priority this year is to strengthen its position in global steel trade governance and sustainability. The country will co-chair the Global Forum on Excessive Steel Capacity with Germany (GFSEC). The forum’s main topics include the effective reduction of distorting subsidies and excess capacity, as well as the transition to a low-carbon industry.

Source: Valor Econômico

To read the full original article please click on the link below:

https://valor.globo.com/brasil/noticia/2022/02/09/brasil-e-eua-discutem-revisao-de-cotas-para-aco.ghtml

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