Brazil says US gave 'ultimatum' over steel, aluminum tariffs

[BRASÍLIA] Brazil said Thursday it has been forced to accept either tariffs or quotas by the US, despite what Washington described as a preliminary deal to resolve a dispute over US tariffs on steel and aluminum.

Brazil was one of several countries, along with the European Union, threatened with tariffs of 25 per cent on steel imports to the United States and 10 per cent on aluminum.

However, on May 1 the Trump administration held off on imposing the measures against Canada, Mexico and the EU, giving them a 30 day reprieve. It also said that it had "agreements in principle" with Argentina, Australia and Brazil that would be finalised "shortly." But Brazilian officials say that agreement was one-sided.

A Brazilian government source told AFP on Thursday that the move was an "ultimatum." "US authorities announced the decision to interrupt the negotiating process and to apply immediately to Brazil the additional tariffs that were temporarily suspended or, alternatively and without any possibility of further negotiation, unilateral restrictive quotas," the ministry of industry said in a statement on Wednesday.

A spokesman for the industry ministry said Thursday in an email that "the Brazilian government understands that negotiations ended," adding that Brasilia "remains open for dialogue."

The government says that the aluminum sector has now decided to accept the 10 per cent tariffs, while the steel sector is opting for quotas, which are seen as less damaging than the 25 per cent tariff.

Brazil accounts for about 14 per cent of US steel imports, while the US market accounted for 32.9 per cent of all Brazil's steel exports last year, the Brazilian government says.

AFP