Trump Backs Away From Tariffs on Brazilian Steel

Brazil's President Jair Bolsonaro said, after a phone call with President Donald Trump Dec. 20, that Brazil will not face tariffs instead of quotas on its steel exports to the United States. Trump had tweeted in early December that the change would come “immediately,” but no Federal Register notice ever put the tweet into action (see 1912020036). He had said at the time that currency devaluation in Brazil and Argentina was “very unfair” to farmers and manufacturers. Argentina and Brazil have taken commodity market share from the U.S. in China, after China imposed tariffs on U.S. products.

Brazil is a major exporter of semi-finished steel slab that U.S. mills then shape into products. The semi-finished slab is subject to more generous quotas than finished steel exports.

Argentina negotiated quotas rather than tariffs on both steel and aluminum. No changes have been made to those quotas since the tweet, but there has been no announcement that Trump changed his mind, either.

Trump did not explicitly say that he was reversing course on Brazil, but tweeted that he and Bolsonaro had discussed trade, and said that the two countries' relationship “has never been stronger!”

It was not clear that Trump could legally justify the change from quotas to tariffs so long after the Section 232 action on steel and aluminum began, given the Court of International Trade's stance on the shift from 25 percent to 50 percent tariffs on Turkish steel. While CIT has not made a ruling on that hike, it dismissed a request for summary judgment with strong language criticizing the arbitrariness of the order (see 1911180013).