Brazil sets quotas, tax for steel products to fight ‘flood’ of imports

Brazil’s government on Tuesday (April 23) decided to establish import quotas for 11 steel products and to impose higher taxes on them when those volumes are exceeded after steelmakers complained about cheap foreign steel “flooding” the local market.

The move to hike import tariffs to 25% will be applied for 12 months on products such as types of rolled steel and pipes, which currently have import fees of 9% to 12.6%, according to the decision from state foreign trade body Gecex/Camex.

Vice President Geraldo Alckmin told reporters the 25% tax will be imposed when imports of each of these 11 steel products exceed their average imports from 2020 to 2022 by more than 30%.

Steelmakers in Latin America’s largest economy had been long asking the government to impose higher taxation on imports, claiming that cheaper steel from Russia and China had been “flooding” the market and making Brazilian firms idle plants.

Brazil’s steel imports rose 25% in the first quarter from a year earlier, according to data from industry lobby group Aco Brasil, which did not immediately respond to requests for comment about the latest government measures.

The government added it was also considering implementing quotas for four other steel products.

“Our analysis shows that imports will remain mostly within the quota,” Alckmin told reporters, dubbing the government’s decision “extremely careful” as steelmakers had asked import taxes on a total of 35 products to be hiked.

“But it’s an important move, because the steel industry is really operating with huge idle rates.”

Gerdau, Usiminas, CSN and the local units of ArcelorMittal and Ternium are some of largest steelmakers operating in Brazil.

Gecex/Camex said in a statement that market conditions will be monitored during these 12 months.

The new trade rules, which still need a greenlight from South American trade block Mercosur, could come into force within a month, it added.

Source: Finance Yahoo

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