MercoPress. South Atlantic News Agency

Brazil to discourage steel imports?

The measure still needs to be greenlighted by Brazil's Mercosur partners

Brazilian authorities announced this week that new measures will be in force concerning the import of steel products. In a move to discourage such practices, goods exceeding the quota of 11 items will be charged higher taxes, Agencia Brasil reported. In other words, if the maximum volume is exceeded, the import duty, currently ranging between 9% and 14.4%, will reach 25%, the Chamber of Foreign Commerce explained. The initiative seeks to prevent unfair competition with domestic steel.

The department belonging to the Ministry of Development, Industry, Trade, and Services also said that the measure would come into force in around 30 days given that the Mercosur partners (Argentina, Paraguay, and Uruguay) will have to consider it first. Brazil’s Revenue Service will also have to issue an ordinance regulating the quotas, Agencia Brasil added. If greenlighted, the extra taxation would be valid for the following 12 months.

In 2023, the volume of imports of the 11 steel products exceeded the average imports between 2020 and 2022 by 30%. In recent months, Brazilian steelmakers have complained of an invasion of Chinese steel, which arrives in Brazil cheaper than domestic products.

Technical studies show that the quotas will have no impact on consumer prices or the production chain, the ministry reported.

“During these 12 months, the government will monitor market behavior. The government expects the decision should contribute to reducing idle capacity in the domestic steel industry,” the statement reads.

Among the 11 steel products listed by the chamber are certain types of flat-rolled iron or non-alloy steel products and tubes for oil and gas pipelines.

(Source: Agencia Brasil)