Trump Tariffs: Impacts on Brazilian Steel and Aluminum and the Global Economy

Clodayre Daine

 

 

United States President Donald Trump announced new tariffs on steel and aluminum imports, directly affecting countries like Brazil. The tariffs, set at 25% on steel and aluminum, also resulted in the cancellation of exemptions that benefited large suppliers of these products, such as Canada, Mexico and Brazil. The measure aims to protect local production of essential metals, but has major impacts on exporting economies, especially Brazil, which is one of the largest suppliers of steel to the American market.

Trump stated that the decision to implement tariffs is a strategy to strengthen the steel and aluminum industry in the United States. The president made it clear that there would be no exceptions, except for Australia, due to the country’s trade surplus with the US. This raised concerns in Brazil, where steel is one of the main exports to the United States. The Brazilian government and the affected industries have not yet officially commented, but the measure promises to strongly affect the country’s exports to the American market.

Brazil, which is the ninth largest steel producer in the world, is faced with a measure that could reduce its exports to the United States. In 2024, Brazil exported 4.1 million tons of steel to the USA, being the second largest supplier of this commodity, behind only Canada. These new tariffs could further harm the already difficult conditions for the competitiveness of Brazilian steel in the global market, considering that the United States is the largest market for steel produced in Brazil.

The aluminum industry will also be hit by Trump’s new tariffs. Brazil ranks 14th among the largest suppliers of aluminum to the United States. With the imposition of a 25% tariff, Brazil may face difficulties in maintaining its share in this market, as tariffs make the product more expensive and less competitive. Furthermore, competition from other countries, such as Canada, may intensify, further reducing Brazilian exports.

The impact of Trump’s tariffs will be felt not only by Brazilian industries, but also by American consumers. Although Trump has argued that the tariffs would protect the US economy, experts point out that the additional cost could be passed on to consumers. An example of this can be seen with the tariffs previously placed on washing machines, which resulted in higher prices for Americans. This could happen again with steel and aluminum, increasing production costs for local companies.

Trump’s tariff strategy can be seen as an attempt to rebalance the United States’ trade agreements, especially with countries like Brazil. However, by implementing these tariffs, the US government also risks harming its own companies, which depend on imports of these materials. Instead of stimulating domestic production, tariffs could create a shortage of materials and increase prices, which would hurt both American producers and consumers.

Retaliation for these tariffs by other countries, including Brazil, may be an increasingly likely scenario. Although Trump has stated that he is willing to apply reciprocal tariffs against countries that tax American imports, the response from affected countries may involve increasing taxes on American products. The European Union, for example, has already indicated that it will take measures to protect its steel and aluminum industries against American tariffs.

Additionally, the reaction from U.S. trade allies such as Canada and the European Union could result in an increase in global trade tensions. The impact of tariffs could spread across multiple economies, affecting not only steel and aluminum producers but also sectors that rely on these materials to manufacture final products. Ultimately, tariffs can be an economic burden for everyone involved, including U.S. consumers who may pay more for products affected by protectionist measures.

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