25% tax on steel and aluminum imports, Promised by US President Donald Trumpimpacts the production of these sectors in Brazil, evaluated foreign trade experts consulted by Brazil agency.
The country of North America is the largest buyer of Brazilian steel. According to data from the Brazil Steel Institute in 2022, the US bought 49% of the total steel exported by the country. In 2024, only Canada surpassed Brazil in the sale of steel to the United States.
In the case of aluminum, US dependence is lower. The country was the destination of 15% of Brazil’s aluminum exports in 2023. The main buyer of Brazilian aluminum is Canada, which absorbed 28% of the exports of this product that year. The data are from the Brazilian Aluminum Association (Abal).
The professor of the Institute of Economics of the Federal University of Rio de Janeiro (UFRJ) Luiz Carlos Delorme Prado stated that possible taxation should have an impact on the affected sectors, but should not have greater problems for the whole economy.
“Although the taxation is very important for these industries, for the whole of the Brazilian economy the impact is not that great. Brazil will have to redirect these exports, or what I think is most important, trying to increase the domestic consumption of steel. Brazil has alternatives. It is different from Mexico and Canada, which are much more dependent on the American market, ”explained Prado.
The expert added that the impact will be lower for the aluminum sector. “The sector may suffer indirectly because Canada’s aluminum product exports to the United States may fall, this can affect Brazilian exports to Canada. But anyway, the impact is less, ”he added.
If the taxation results in falling in the production of these products in Brazil, there will be economic, productivity and job loss in these sectors and other areas interconnected to steel and aluminum, assessed economist, doctor of international relations and CEO of Amerer Consulting, Igor Lucena.
“In Brazil, you will have a decrease in the furnace, decrease in the production chain and this decrease ends up generating a drop in production, which means dismissal of employees, drop in revenues and even impact on our trade balance, with reflections on GDP”, commented in an interview with Brazil agency.
Reciprocity
The Brazilian government is waiting for the US government to officialize the 25% tax on steel and aluminum imports to comment on the subject, informed Finance Minister Fernando Haddad.
Last week, President Luiz Inacio Lula da Silva stated that Brazil You can use the reciprocity lawincreasing the rates of US products consumed by Brazil. “The least decency that deserves a government is to use the reciprocity law,” he said in an interview with radios in Minas Gerais.
Protectionism
Analysts evaluate that the measure may be an attempt by the Trump administration to favor the US steel market by getting the product purchased abroad with it. However, economist Igor Lucena pondered that there will be negative effects on the US.
“A more expensive steel for the United States or a lack of steel will negatively impact the American economy. There is no doubt about this, ”he said, adding that the announcement of this tariff may be a tactic to get concessions from countries in negotiations in other areas.
Professor Luiz Carlos Prado stressed that this negotiation tactic is detrimental to the functioning of the international economy. “This leads to waves of shocks, leads to reduced investment, leads to retaliation, because, of course, Brazil must retaliate. If Brazil does not react, it is much more vulnerable to this kind of pressure, ”he said.
During his first term, Trump imposed fees on steel and aluminum, but then granted exemption quotas for partners, including Canada, Mexico and Brazil, which are the main suppliers of these products.
