US may reimpose tariffs on Brazil, Argentina

US president Donald Trump today moved to reimpose steel and aluminum tariffs on Brazil and Argentina after accusing those countries of currency manipulation.

The US government still has to formalize Trump's tariffs, which would impose Section 232 tariffs of 25pc and 10pc, respectively, on steel and aluminum exports from the two countries into the US. Since August 2018, Argentina and Brazil have been under a quota system and exempted from 232 tariffs for steel and aluminum exports to the US.

The potential tariff change comes as US hot-rolled coil (HRC) prices have been rising in the last month on the back of three price increases from most of the domestic steel mills.

The Argus weekly domestic US HRC index rose by $7.50/st to $546/st ex-works Midwest last week, the fifth consecutive increase.

Mills that would be most impacted by the tariffs are those that import semi-finished and other steel products from the countries, including ArcelorMittal's Calvert joint venture with Nippon Steel in Alabama, Evraz, re-roller NLMK and JSW USA, according to analysts.

Currently South Korea, a major exporter of steel pipe and other oil country tubular goods (OCTG) products, remains the only remaining country with a quota system, while Australia, Canada and Mexico have no tariffs in their steel and aluminum exports to the US.

Through September, Brazil has exported 4.1mn st of steel products to the US, with most steel products being semi-finished blooms, billets and slabs. That figure is up by 14pc from the same period of 2018.

Argentina had 14,000st of steel exports through September 2019, up from 2,100st in the same period of 2018.

US aluminum imports from Argentina over the first nine months of 2019 increased by 4pc in 2019 to 142,000t. Imports of Brazilian aluminum exports rose by 4pc to 48,000t over the first nine months of 2019 from the prior year.

By Rye Druzin