In the first month after US President Donald Trump’s administration introduced a 25 percent tariff on steel imported by the US, Brazilian firms increased the sales of the product to the country. In June, Brazil’s steel exports to the US market added up to $548.6 million, nearly three times as June 2017 ($210.8 million).
An increase was also observed in the volume shipped—386.9 thousand tons in June 2017 against last month’s 885.2 thousand. The figures were released today (Jul. 12) by Brazil’s Ministry of Industry, Foreign Trade, and Services.
One of the factors behind the growth is believed to be the end of the countrywide strike staged by truck drivers. The stoppage led steel exports to the US to sink to $110.8 thousand in May. In June, the sum recovered, with companies selling in the ten days following the strike the output that had not been exported.
Tariff exemption
Another factor likely to have helped boost steel sales was the decision to exempt Brazil from the 25-percent tariff. After negotiations, the change affected Brazilian, Argentine, and South Korean steel as a quota was set for the export of the product. For Brazil, the limit for semi-finished steel, used as supply by US companies, will stand at 100 percent of the average exported from 2015 to 2017.
For finished goods, the rate will be set at 70 percent. Limits are to come into effect on June 1. Until 2018 export quotas are reached, Brazilian steel is not taxed, which alows Brazil to benefit from the high price of steel in the global market.
