Brazil Set To Launch Trade Case Against The U.S. Over Steel

14 September 2016

Brazil will most likely launch a new trade dispute against the United States at the World Trade Organization over its decision to raise duties on some Brazilian steel imports, Trade Minister Marcos Pereira told Reuters.

Pereira said he expects the government's chamber of foreign trade, known as Camex, to approve his call to initiate the case after Washington decided to slap higher duties on Brazilian cold-rolled steel to fight a glut of steel imports.

"I will defend that position... and I believe the chamber will support it because what the United States is doing is not legal," Pereira said in an interview late on Monday.

The United States has accused Brazilian producers of benefiting from hefty subsidies of seven export promotion programs to the detriment of U.S. steelmakers. A preliminary rule by U.S. International Trade Commission (ITC) ordered an increase in duties on Brazilian cold-rolled steel.

Washington will charge anti-subsidy duties of 11.31 percent and 11.09 percent on exports from Cia. Siderúrgica Nacional SA and Usinas Siderurgicas de Minas Gerais SA respectively.

Usiminas and CSN, as both companies are known, are the top producers of cold-rolled steel in Brazil, which exported $285 million worth of the product to the United States in 2015, according to trade ministry data.

Brazil will also challenge a separate decision by ITC late on Monday to raise anti-subsidy duties to just over 11 percent on hot-rolled flat steel imports from Brazil, the trade ministry said on Tuesday.

The latest clash could again raise tensions between the Americas' two biggest economies as trading partners worldwide tussle over every little bit of market share amid a sluggish global economy.

For over a decade, both countries have fought bitterly to settle a U.S. cotton subsidies case that became a landmark at the WTO and nearly prompted Brazil to raise tariffs on U.S. products.

Brazilian officials are also gathering evidence to show that the United States is increasing subsidies for soy and corn farmers, which threatens to further push down prices for the key crops grown in the South American country, sources told Reuters last year.

A crippling two-year recession in Brazil has hurt steelmakers who were already reeling from depressed world prices that have forced the firing of thousands of workers over the last few years.

Brazilian cold-rolled steel is mostly exported for the auto and appliances industries, but it is also used for a wide variety of products that require high strength such as steel bars and rods.


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