The country is the second largest supplier to the American market; the Trump administration says the increase is necessary for the health of its industries. On Tuesday, June 3rd, U.S. President Donald Trump signed a decree doubling import tariffs on steel and aluminum, raising them from 25% to 50%. The measure has already taken effect and will impact Brazilian exports, Brazil being the second largest steel supplier to the American market.
According to the text, the decision was made after analyses showed that previous tariffs were insufficient to curb the inflow of low-priced foreign products, which compromises the competitiveness of U.S. steel and metal industries.
The U.S. government claims that the tariff hike is necessary to ensure the health of these companies and to meet national defense needs. The initial increase to 25% was announced in February.
The measure applies to all countries exporting these metals to the U.S., except the United Kingdom, which maintains a 25% tariff due to a bilateral agreement signed in May.
Brazil, therefore, is subject to the new 50% tariff, which may impact Brazilian exports, especially of semi-finished steel, one of the main products sent to the U.S. These are intermediate steel products that must be further processed to become final goods. They serve as raw material for manufacturing items such as sheets, profiles, tubes, and other products.
When questioned, the Brazilian government and the Brazilian Steel Institute (Instituto Aço Brasil), which represents the Brazilian steel industry, had not yet commented on the decision.
“A 50% tariff is practically prohibitive and will have to be passed on to prices. The big issue is that the United States is not self-sufficient in steel. They will have to continue importing, including some types of steel not manufactured there,” said Welber Barral, former foreign trade secretary and partner at Barral Parente Pinheiro Law Firm.
“This unilateral increase, besides violating international rules, will have a negative impact and will likely face much pressure from the American industry.”
The measure was expected since Friday, May 29, when Trump said at a rally at the US Steel plant in Pennsylvania that he would double the surtax to protect the sector. The announcement also comes as U.S. trade partners rush to sign agreements in the final days of a 90-day tariff truce set to expire on July 9.
According to U.S. data, last year Canada was the largest steel supplier by volume to the U.S., with 20.9% of the total, followed by Brazil (16%, with 3.88 million tons and the country with the highest export growth compared to 2023) and Mexico (11.1%).
In terms of value, Brazil ranked just behind Mexico: it received €2.34 billion, compared to Mexico’s €2.45 billion and Canada’s €5.17 billion. In January, Brazil was the largest exporter by volume for the month (499,000 tons), surpassing Canada (495,000 tons).
In March this year, the latest month with available statistics, Brazil only lost in quantity to Canada (367,000 tons vs. 364,000). In value, Brazilian steel (€197.6 million) lagged behind Canada (€346.9 million) and Mexico (€216 million).
In 2018, during his first term, Donald Trump also applied a 25% tariff on steel imported to the U.S. But later the American government reduced the import quota of semi-finished steel from Brazil. In 2022, under Joe Biden, the U.S. revoked these restrictive measures.
Regarding aluminum, trade between the two countries moved €234.5 million of the total €1.3 billion exported by the sector in 2024. Although Brazil’s share in U.S. aluminum imports is small (less than 1%), the U.S. accounts for 16.8% of Brazilian metal exports.
Earlier on Tuesday, the White House confirmed that the Trump administration sent letters to countries giving them until Wednesday, June 4, to present proposals for agreements on tariffs imposed on all products imported to the United States, including steel and aluminum.
The Brazilian government has not yet confirmed receipt of the letter. Brazil seeks mainly to gain advantages in negotiations on steel and wants the U.S. to establish quotas on the product.
“The president expects good agreements, and we are on track for that,” said the White House spokeswoman on Tuesday.
Source: Economia & Mercado
