Brazil has failed to reach a compromise to the Joe Biden administration to remove the barriers to national steel set up by Donald Trump months before the US election.
The theme was one of Brazil’s hopes in Los Angeles during the Americas Summit. But senior sources at the Ministry of Economy told the column that there was no word or head sign that the tariffs would be lifted. At Itamaraty, diplomats also confirmed that technical contacts had taken place. But the Americans did not agree to make any gestures, at least for the time being.
The highest score achieved by Brazil was an indication that the issue could come up again. However, without any commitment that the block was removed. The impression in Itamaraty is that Biden agreed to meet with Bolsonaro only to save a summit that was threatened with evacuation. However, this did not mean any concessions, let alone in a strategic area such as the steel industry.
Despite this, Bolsonaro said he was “surprised” to meet with Biden and described the meeting as “great”.
Privileged relationship between Bolsonaro and Trump questioned
When the barrier was set in 2020, it morphed into another chapter that exposed the limits of the supposedly privileged relationship Planalto believed he had with the White House. The decision was made on the eve of the US presidential election in a sector critical to Republican support.
The Brazilian government, however, refrained from criticizing the decision, in a reaction even within Itamaraty that was interpreted as a sign of support for Bolsonaro’s failed attempt to re-elect his ally in Washington.
Trump announced that he had lowered quotas for imports of certain steel products from Brazil and reopened the level set in 2018 between the two countries. The fear for exporters was that there would be an increase in import tariffs, which was avoided. Still, the package meant Brazil could sell for less.
To justify his decision, Trump claimed that there was a contraction in the American steel market. “While imports from most countries have fallen in proportion to this contraction this year, imports from Brazil have decreased only slightly,” Trump said in his decision.
According to him, the secretary of commerce briefed him on “significant changes in the US steel market from the moment I decided to exclude Brazil in the long term from the modified tariff announced in the 9705 Statement”. He was referring to the decision not to increase tariffs against Brazilian products.
The measure hit the heart of Brazil’s steel exports, as semi-finished products account for more than 80% of Brazil’s US supply and generate revenues of approximately US$2 billion.
There was a threat that Brazilian products would incur a 25% surcharge, which was avoided after some negotiations. Despite this, the quota cut was a negative sign for Brazilian exports.
During the first two years of government, Bolsonaro began to keep Washington a priority in his foreign policy. The Brazilian government granted access to American wheat, abandoned its developing country status, bowed to strategic issues, and changed the country’s historic UN votes to align with the American votes.
The expectation, however, was revenge on the US government in many areas, including the business sector.
In a memo issued at the time, Itamaraty remained hopeful that an agreement would be reached with the White House and avoided any criticism of the decision, which resulted in lost revenues for exporters.
The Brazilian government has signaled that it expects a recovery in the American steel industry on the eve of the election of its ally in Washington. The government has never indicated that it may question the quota in the WTO; this is a stance that Brazil often uses to defend its business interests.
source: Noticias
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