Brazil's steel exports and production could fall by 11pc and 2pc, respectively, in 2025 because of recently imposed 25pc US tariffs on all imported steel, according to national economic research institute Ipea.
The decline in steel output resulting from the US import tariff is estimated at 700,000 metric tonnes (t)/yr, leading to an export loss of 1.6mn t, according to Ipea.
Brazil was the US' top semi-finished steel supplier in 2024, shipping 3.4mn t of slabs there, which accounted for nearly 80pc of its total slab exports last year, according to customs data.
The US tariffs will have a negligible impact on Brazil's overall exports and GDP, according to Ipea's study.
The Chinese threat
But Brazilian steelmakers are more concerned about Chinese imports than US tariffs.
Chinese steel dumping causes greater harm to the industry and the economy than US tariffs, according to Brazilian steelmaker CSN's executive director Luis Fernando Barbosa Martinez.
Brazil levied a 25pc import tariff on 11 steel products in June 2024 following the domestic steelmakers' push for safeguard measures. The move proved ineffective as imports hit record highs in 2024, nearly 70pc of which shipped from China.
The government's import methodology, criticized for setting quotas by adding 30pc to the average steel imports from 2020-2022 for 11 products, is set to expire in two months. Importers and steelmakers are on opposite sides of the issue, with the former advocating against and the latter asking for more safeguards.
Political implications
Political dynamics are expected to influence steel prices just as much as the balance between supply and demand.
President Luiz Inacio Lula da Silva — whose popularity has hit its lowest point across his three terms, just one year ahead of the 2026 elections — and vice-president Geraldo Alckmin — who also serves as trade minister — have been meeting with key stakeholders, including automakers, steelmakers and household appliance manufacturers, for the past two weeks.
Automaker Stellantis recently announced R30bn ($530mn) in investments, while steelmakers pledged R100bn ($17bn) last year, aligned with the imposition of tariff quotas. Both sectors highlight their potential to create jobs.
Steel industry chamber Instituto Aço Brasil warned of job losses and idled furnaces unless further measures are taken to weaken Chinese imports' flow.
The steel industry supports 72,700 direct and 49,000 indirect jobs, according to the latest data from Instituto Aço Brasil. And the automotive sector currently accounts for 108,000 jobs, national association of motor vehicle manufacturers Anfavea said.
Importers argued that additional tariffs may drive inflation and higher interest rates, as well as slash demand and harm the economy as a whole.
