News
16/07/26
US exempts pig iron from new Brazil tariffs
London, 16 July (Argus) — The US will exempt pig iron and iron ore from new 25pc
tariffs on Brazilian imports, the United States Trade Representative said on 15
July. Many Brazilian pig iron market participants had expected to face US
tariffs , with some looking at Europe as an alternative destination. But mills
in Europe have only a fraction of the US' pig iron demand, so some producers are
concerned they will have to ramp down or heavily discount shipments to the US.
Producers in Ukraine and India had also hoped to capitalise on new US tariffs on
Brazil, expecting higher prices and a larger share of the US market. The
exemptions will limit opportunities for them, but most market participants
expect the ruling to have little immediate impact. "Both sides need to digest a
little," a European trader said today. "The Brazilians have switched to more
domestic sales, and the US customers have started importing from elsewhere,
India in particular." Another trader argued that Brazilian producers will have
to sell at lower prices than they secured in June, citing intense competition
from other countries. "It is the summer season, so it is quieter, and Indian
offers probably put a cap on Brazil," he said. "If India is [offering] around
$480/t cfr Nola, Brazil may be around $495-500/t cfr, so $460-470/t fob." Argus
assessed basic pig iron at $491.25/t fob southern Brazil on 14 July, with few
new price signals as Brazilian producers kept away from the spot market ahead of
the tariff ruling. Buyers in Europe could have benefited from US tariffs on
Brazil. The EU considers Brazilian pig iron to be less carbon-intensive than
Indian or Ukrainian material because it is made with charcoal, leaving Brazilian
products with lower carbon border adjustment mechanism charges in the EU. If
Brazilian producers could no longer price into the US, European buyers may have
been able to negotiate lower prices for pig iron. The new tariffs will probably
have only a limited impact on Brazilian industry in general, with a long list of
exemptions covering most Brazilian products sold to the US. "It is much like
last time, there are exemptions for a huge amount [of products], as most are
consumer-facing or not produced domestically," the second trader said. The US
could still slap a 12.5pc forced-labour tariff on Brazilian pig iron as part of
its section 301 investigations, which are set to end on 24 July. But many in the
market view both investigations as a political manoeuvre to enforce maximum
tariffs after the US Supreme Court ruled against President Donald Trump's 2025
"Liberation Day" tariffs in February, meaning the US could exempt the same
products in the second ruling. By Austin Barnes Send comments and request more
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