By rikififi90 
The decision by U.S. President Donald Trump to impose 25% tariffs on all steel and aluminum imports took effect on March 12, 2025, directly impacting Brazil, a key supplier of these products to the American market. Signed in February, the measure aims to bolster the U.S. domestic industry but raises concerns for Brazil’s steel sector, which exported 4.1 million tons of steel to the U.S. in 2024, trailing only Canada. Experts predict the primary consequence will be a reduction in Brazilian exports, forcing the country to seek new markets or manage a domestic surplus that could depress prices and production. This scenario poses economic challenges and uncertainties for Brazilian companies and workers, while the government explores negotiation strategies to mitigate the damage.
Globally, the policy affects other major U.S. trading partners like Canada and Mexico, but Brazil feels the strain due to its prominent role: it ranks as the second-largest steel supplier and a significant aluminum exporter. U.S. Department of Commerce data reveals that 25% of steel and 50% of aluminum consumed in the U.S. are imported, with Brazil holding a substantial share. Trump’s decision aligns with his campaign pledge to prioritize domestic production, though his track record of fluctuating tariff policies during his first term hints at potential adjustments or negotiations ahead.
Brazil’s government responded with criticism, labeling the taxation unjustifiable and misguided, and signaled plans to engage in dialogue with the U.S. to safeguard national interests. Meanwhile, steel companies and analysts assess the fallout, which ranges from direct export losses to potential ripple effects in the domestic market. The situation demands swift adaptation from Brazil amid one of the most significant trade shocks in its recent U.S. relations.
Economic impact unfolds
Exports at risk: the tariff burden on Brazil
Brazil faces a critical juncture with the enforcement of the 25% tariffs on steel and aluminum by the United States. In 2024, the country exported $5.7 billion in steel and iron and $267 million in aluminum to the U.S., which absorbs about 48% of Brazil’s external steel sales and 16% of its aluminum shipments. As the second-largest steel supplier, with 4.1 million tons shipped last year, Brazil trails only Canada, which sent 6 million tons. Analysts warn that export declines could lead to losses of up to $1.5 billion, according to estimates from the Institute of Applied Economic Research (Ipea). The steel sector, a major employer in states like São Paulo, Minas Gerais, and Rio de Janeiro, may face production cuts and revenue drops, affecting the entire supply chain, from mining to transportation.
Brazilian steel industry scrambles for solutions
The Brazilian steel and aluminum industry now races to adapt to this new reality. With the U.S. as the primary destination for steel exports, the tariffs compel the sector to find new buyers in a global market already oversaturated by competition, particularly from China, the world’s leading steel producer. For aluminum, the impact is less severe but still notable, given the U.S.’s significant share of external sales. The challenge lies in redirecting surplus production without flooding the domestic market, which could lower prices and squeeze company profits.
Trump doubles down on U.S. industry
In the United States, Donald Trump defended the tariffs as vital to revitalizing domestic steel and aluminum production, which he deems critical to national security. Signing the decree on February 10, he stated that these metals must be made on American soil, not in “foreign lands.” The policy reflects his strategy to shrink trade deficits with partners like Brazil, Canada, and Mexico, though it raises costs for U.S. industries reliant on imported materials, such as automotive and construction sectors.
Trade crisis deepens
How tariffs hit Brazilian companies
The 25% tariffs unevenly affect steelmakers operating in Brazil. Multinational firms like ArcelorMittal and Ternium, which export large volumes of semi-finished steel slabs to the U.S., are among the most exposed. These companies, accounting for over 80% of Brazil’s steel exports, may see their trade flows shrink as the added cost hampers competitiveness in the American market. Conversely, Brazilian firms like Gerdau, Usiminas, and CSN, with operations more focused domestically or with U.S.-based plants like Gerdau’s, are expected to weather the storm better. An Itaú BBA report suggests Gerdau could even gain, leveraging its U.S. production to meet American demand without tariff barriers. Still, a domestic steel surplus could depress prices in Brazil, impacting profit margins across the board.
Tariff timeline: a history of tensions
Trump’s tariffs are not a first for Brazil, which faced similar measures during his initial term. Here’s a rundown of key moments in this trade relationship:
- March 2018: Trump imposes 25% tariffs on steel and 10% on aluminum, but grants Brazil an exemption after talks, replacing taxes with export quotas based on the 2015-2017 average.
- December 2019: He threatens to reinstate tariffs, citing real devaluation, but backs off after discussions with then-President Jair Bolsonaro.
- August 2020: Brazil’s export quotas are slashed by 80%, further restricting market access.
- October 2020: Aluminum sheet tariffs jump from 15% to 145% over dumping claims, later revoked in 2022 under Joe Biden’s administration.
The 2025 tariff revival ends a period of relative calm, reigniting trade friction between the nations.
Brazil’s response: negotiations underway
Facing the new tariffs, Brazil’s government ramped up diplomatic efforts to limit the damage. Vice President Geraldo Alckmin sought meetings with U.S. officials shortly after Trump’s announcement, while Finance Minister Fernando Haddad stressed that negotiation, not retaliation, is the priority. After meeting steel industry representatives on March 12, Haddad emphasized a reciprocal yet dialogue-driven approach. The government views the unilateral barrier as unwarranted and aims to defend its producers, potentially turning to the World Trade Organization (WTO) if talks falter.
Looking ahead
Global market hurdles for Brazilian steel
With U.S. access curtailed, Brazil must find new outlets for its steel and aluminum in a fiercely competitive global landscape. China, the top steel producer and exporter, is a potential buyer, but its demand for Brazil’s semi-finished products remains uncertain, given its focus on domestic output. Other markets, like Europe and Latin America, are viable but require logistical adjustments and compliance with local standards. Domestically, increased supply could benefit sectors like construction by lowering prices, yet it risks devaluing the real, raising import costs and complicating matters for steelmakers.
Broader economic fallout in Brazil
The drop in steel and aluminum exports to the U.S. could ripple beyond the steel industry. Experts foresee knock-on effects, including job losses in factories and related sectors like transportation and mining. Data from the Brazilian Steel Institute shows that nearly 10% of Brazil’s total exports to the U.S. in 2024 came from steel, a share that, while not dominant, is vital to bilateral ties. Additionally, rising steel costs in the U.S. could stoke American inflation, prompting the Federal Reserve to keep interest rates high, strengthening the dollar and pressuring emerging markets like Brazil with higher import costs and local inflation.
Uncertain future: what’s next for the tariffs
The tariffs’ fate remains unclear, given Trump’s history of reversing or tweaking policies under pressure. In the U.S., CEOs of industries reliant on imported steel and aluminum have voiced concerns over rising production costs, potentially fueling a pushback against the taxes. Meanwhile, Brazil weighs its options. Here are possible outcomes:
- Quota negotiations: Brazil could secure a new quota deal, akin to 2018, to retain some U.S. market access.
- Market diversification: Strengthening ties with Europe and Asia might lessen reliance on the U.S.
- Boosting domestic use: Encouraging local steel demand could absorb surplus, though it requires careful planning to avoid price drops.
- Trade retaliation: If talks fail, Brazil might tax U.S. goods like metallurgical coal, a key import.
Brazil’s response and Trump’s next moves in the coming months will shape the course of this trade crisis.
The decision by U.S. President Donald Trump to impose 25% tariffs on all steel and aluminum imports took effect on March 12, 2025, directly impacting Brazil, a key supplier of these products to the American market. Signed in February, the measure aims to bolster the U.S. domestic industry but raises concerns for Brazil’s steel sector, which exported 4.1 million tons of steel to the U.S. in 2024, trailing only Canada. Experts predict the primary consequence will be a reduction in Brazilian exports, forcing the country to seek new markets or manage a domestic surplus that could depress prices and production. This scenario poses economic challenges and uncertainties for Brazilian companies and workers, while the government explores negotiation strategies to mitigate the damage.
Globally, the policy affects other major U.S. trading partners like Canada and Mexico, but Brazil feels the strain due to its prominent role: it ranks as the second-largest steel supplier and a significant aluminum exporter. U.S. Department of Commerce data reveals that 25% of steel and 50% of aluminum consumed in the U.S. are imported, with Brazil holding a substantial share. Trump’s decision aligns with his campaign pledge to prioritize domestic production, though his track record of fluctuating tariff policies during his first term hints at potential adjustments or negotiations ahead.
Brazil’s government responded with criticism, labeling the taxation unjustifiable and misguided, and signaled plans to engage in dialogue with the U.S. to safeguard national interests. Meanwhile, steel companies and analysts assess the fallout, which ranges from direct export losses to potential ripple effects in the domestic market. The situation demands swift adaptation from Brazil amid one of the most significant trade shocks in its recent U.S. relations.
Economic impact unfolds
Exports at risk: the tariff burden on Brazil
Brazil faces a critical juncture with the enforcement of the 25% tariffs on steel and aluminum by the United States. In 2024, the country exported $5.7 billion in steel and iron and $267 million in aluminum to the U.S., which absorbs about 48% of Brazil’s external steel sales and 16% of its aluminum shipments. As the second-largest steel supplier, with 4.1 million tons shipped last year, Brazil trails only Canada, which sent 6 million tons. Analysts warn that export declines could lead to losses of up to $1.5 billion, according to estimates from the Institute of Applied Economic Research (Ipea). The steel sector, a major employer in states like São Paulo, Minas Gerais, and Rio de Janeiro, may face production cuts and revenue drops, affecting the entire supply chain, from mining to transportation.
Brazilian steel industry scrambles for solutions
The Brazilian steel and aluminum industry now races to adapt to this new reality. With the U.S. as the primary destination for steel exports, the tariffs compel the sector to find new buyers in a global market already oversaturated by competition, particularly from China, the world’s leading steel producer. For aluminum, the impact is less severe but still notable, given the U.S.’s significant share of external sales. The challenge lies in redirecting surplus production without flooding the domestic market, which could lower prices and squeeze company profits.
Trump doubles down on U.S. industry
In the United States, Donald Trump defended the tariffs as vital to revitalizing domestic steel and aluminum production, which he deems critical to national security. Signing the decree on February 10, he stated that these metals must be made on American soil, not in “foreign lands.” The policy reflects his strategy to shrink trade deficits with partners like Brazil, Canada, and Mexico, though it raises costs for U.S. industries reliant on imported materials, such as automotive and construction sectors.
Trade crisis deepens
How tariffs hit Brazilian companies
The 25% tariffs unevenly affect steelmakers operating in Brazil. Multinational firms like ArcelorMittal and Ternium, which export large volumes of semi-finished steel slabs to the U.S., are among the most exposed. These companies, accounting for over 80% of Brazil’s steel exports, may see their trade flows shrink as the added cost hampers competitiveness in the American market. Conversely, Brazilian firms like Gerdau, Usiminas, and CSN, with operations more focused domestically or with U.S.-based plants like Gerdau’s, are expected to weather the storm better. An Itaú BBA report suggests Gerdau could even gain, leveraging its U.S. production to meet American demand without tariff barriers. Still, a domestic steel surplus could depress prices in Brazil, impacting profit margins across the board.
Tariff timeline: a history of tensions
Trump’s tariffs are not a first for Brazil, which faced similar measures during his initial term. Here’s a rundown of key moments in this trade relationship:
- March 2018: Trump imposes 25% tariffs on steel and 10% on aluminum, but grants Brazil an exemption after talks, replacing taxes with export quotas based on the 2015-2017 average.
- December 2019: He threatens to reinstate tariffs, citing real devaluation, but backs off after discussions with then-President Jair Bolsonaro.
- August 2020: Brazil’s export quotas are slashed by 80%, further restricting market access.
- October 2020: Aluminum sheet tariffs jump from 15% to 145% over dumping claims, later revoked in 2022 under Joe Biden’s administration.
The 2025 tariff revival ends a period of relative calm, reigniting trade friction between the nations.
Brazil’s response: negotiations underway
Facing the new tariffs, Brazil’s government ramped up diplomatic efforts to limit the damage. Vice President Geraldo Alckmin sought meetings with U.S. officials shortly after Trump’s announcement, while Finance Minister Fernando Haddad stressed that negotiation, not retaliation, is the priority. After meeting steel industry representatives on March 12, Haddad emphasized a reciprocal yet dialogue-driven approach. The government views the unilateral barrier as unwarranted and aims to defend its producers, potentially turning to the World Trade Organization (WTO) if talks falter.
Looking ahead
Global market hurdles for Brazilian steel
With U.S. access curtailed, Brazil must find new outlets for its steel and aluminum in a fiercely competitive global landscape. China, the top steel producer and exporter, is a potential buyer, but its demand for Brazil’s semi-finished products remains uncertain, given its focus on domestic output. Other markets, like Europe and Latin America, are viable but require logistical adjustments and compliance with local standards. Domestically, increased supply could benefit sectors like construction by lowering prices, yet it risks devaluing the real, raising import costs and complicating matters for steelmakers.
Broader economic fallout in Brazil
The drop in steel and aluminum exports to the U.S. could ripple beyond the steel industry. Experts foresee knock-on effects, including job losses in factories and related sectors like transportation and mining. Data from the Brazilian Steel Institute shows that nearly 10% of Brazil’s total exports to the U.S. in 2024 came from steel, a share that, while not dominant, is vital to bilateral ties. Additionally, rising steel costs in the U.S. could stoke American inflation, prompting the Federal Reserve to keep interest rates high, strengthening the dollar and pressuring emerging markets like Brazil with higher import costs and local inflation.
Uncertain future: what’s next for the tariffs
The tariffs’ fate remains unclear, given Trump’s history of reversing or tweaking policies under pressure. In the U.S., CEOs of industries reliant on imported steel and aluminum have voiced concerns over rising production costs, potentially fueling a pushback against the taxes. Meanwhile, Brazil weighs its options. Here are possible outcomes:
- Quota negotiations: Brazil could secure a new quota deal, akin to 2018, to retain some U.S. market access.
- Market diversification: Strengthening ties with Europe and Asia might lessen reliance on the U.S.
- Boosting domestic use: Encouraging local steel demand could absorb surplus, though it requires careful planning to avoid price drops.
- Trade retaliation: If talks fail, Brazil might tax U.S. goods like metallurgical coal, a key import.
Brazil’s response and Trump’s next moves in the coming months will shape the course of this trade crisis.
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