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U.S. Steel Tariff Could Make Brazil Lose R$ 1.1 Billion in Exports

04/02/2018 - 10h32

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FLAVIA LIMA
FROM SÃO PAULO

If applied, the U.S.'s new tariff on imported steel would affect at least 13% of the steel exported by Brazil. Also, it would lead to losses of US$ 350 million (some R$ 1.1 billion) in comparison to the volume exported in 2017 – US$ 2.63 billion, 33% of the total steel exported by Brazil that year.

The data were disclosed in a new study by the Institute for Applied Economic Research (Ipea) to which Folha had access.

The measure announced by President Donald Trump would also lead to a decline of 1.2% in the activity level in the Brazilian sector and would affect the production of semi-finished steel - for example, the steel sheets used by automakers.

After disclosing the new measure, the Trump administration suspended its effects until April 30 to negotiate with a group of countries, including Brazil. Today the tariff stands at 0.9%.

In addition to Brazil, the most affected countries are Japan, China and some members of the European Union, such as Germany. Canada and Mexico were exempted and South Korea is working to reach an agreement with the U.S.

Kevin Lamarque/Reuters
U.S President, Donald Trump
U.S President, Donald Trump

STRONGER EFFECT

The effect on Brazilian exports, however, could be twice as big in a scenario of stress, in which Brazil would be the only country affected by the new tariff. As it would lose market to its competitors, Brazilian exports would fall by 26%, while the industrial activity in the sector would decline by 2.6%.

Translated by THOMAS MUELLO

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