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Mexico, Brazil and Argentina express concerns about US tariff on steel

Sao Paulo (Platts)--2 Mar 2018 705 pm EST/005 GMT


Governments and steel industry organizations in Mexico, Brazil and Argentina are expressing concerns to US President Donald Trump's announcement of tariffs of 25% on steel imports from all other countries.

Trump did not provide details Thursday about whether the 25% tariff will have exclusions for certain countries or products.


MEXICO: STEEL ASSOCIATION CANACERO CALLS FOR 'RECIPROCAL MEASURES'


"Canacero expects immediate reciprocal measures from our government if our country is included in the [Section 232] measures," the association said.

According to the association, Mexico imported $4.4 billion of steel from the US last year and exported $2.6 billion to its northern neighbor.

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The US recorded a steel trade surplus of $3.6 billion with Mexico in the past two years.

"The steel industry hopes Mexico will be excluded ... in order to avoid a trade war that would affect supply chains in both countries," it said.

The association also demanded measures to stop a "potential wave of unfair imports," which could be diverted from the US to Mexico after the US implements any import measures.

Canacero believes a tariff on Mexican steel would be a violation of the North American Free Trade Agreement (NAFTA) "just when negotiations are taking place," it added.


BRAZIL: RETALIATORY ACTIONS NOT RULED OUT


Brazil's government has not ruled out retaliatory measures to protect its interests, according to the Industry Ministry. Brazilian steel does not represent a threat to US national security, the ministry said in a statement.

"The steel industries of both countries complement one another," said the ministry, noting that about 80% of Brazil's steel exports are semifinished products and represent an important input for the American steel industry.

"This is not a fair trade relationship," said the Brazilian steel Institute Aco Brasil in a statement.

Aco Brasil earlier this month sent a delegation to Washington seeking exemption of the tariffs.


ARGENTINA: STEEL CHAMBER FLAGS KNOCK-ON EFFECTS FOR US OIL INDUSTRY


The US tariff would strongly impact Argentine seamless steel tubing production and ultimately the US oil industry, according to the Argentinian Steel Chamber, Camara Argentina del Acero (CAA).

Argentina exported 210,768 mt of tube steel valued at $222 million to the US in 2017, according to US Commerce Department and International Trade Commission data.

Tube maker Tenaris Siderca, part of the Techint Group, exports around 70% of its production, with the US the main destination.

The steel association also expressed its concerns as the 232 decision could generate a diversion of steel exports towards Latin America and Argentina in particular, which is a common destination for "unfair trade conditions from countries such as China, South Korea, Vietnam, Russia and Ukraine," it said.

CAA added that it was particularly important that Argentina have "agile and adequate mechanisms to face the challenge that involves the changing scenario that could occur imminently."

--Adriana Carvalho, adriana.carvalho@spglobal.com
--Guilherme Baida, guilherme.baida@spglobal.com
--Edited by Richard Rubin, richard.rubin@spglobal.com




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