On December 2, President Trump issued an immediate imposition of duties on steel imported from Brazil and Argentina.
In early 2018, the USA imposed import duties on aluminum and steel under Section 232, but at this time Brazil and Argentina are not subject to tariffs but are entitled to import quotas. Because of that quota, the volume of steel imported into the USA market from Brazil has increased, accounting for about US $ 2.6 billion, up more than 21% from the beginning of 2018 to the present time. Similarly, Argentina’s import volume also increased sharply.
In addition, the governments of Brazil and Argentina have also carried out activities to build relationships with the US government to improve the harmony between the parties.
President Trump’s December 2 decision could be seen as a fatal blow to Brazil and Argentina’s steel industry as both markets are trying to improve production to meet America market demand. However, this is not a favorable decision for the US steel industry as domestic steelmakers need to import semi-finished products from Brazil and Argentina to operate the plant.
It is currently not clear what caused the decision of President Trump. But it may be due to the monetary policies of these countries.
The US Department of Treasury twice a year reviews a monetary policy review of all major economies to determine if any country is manipulating currency improperly. This is at least the second time that President Trump has declared policies of another country that are not in line with the Ministry of Finance’s official assessment.
Argentina is in the midst of an economic crisis and is facing rising inflation and economic contraction. The peso has lost more than half its value since last year. In response to inflation, the Central Bank of Argentina has raised interest rates significantly. The troubles in Argentina have affected the Brazilian economy.
The next move is likely to be negotiation between USA and Brazil and Argentina. President Trump has always been an unpredictable person, so maybe there will be other changes in this tax policy in the near future.
To know more about Trade Defense or Technical Barrier, please feel free to contact us at:
Ms Lan – Juridical Manager of MRS Steel
Phone / Whatssap: +84 962 343 746