Trump Targets Steel From Brazil, Mexico

Aiming to protect the U.S. steel industry during the pandemic, the Trump administration has announced cuts on steel imports from Brazil.

The president also took steps to curb steel imports from Mexico by pushing for increased supervision of its export levels of certain products, including standard pipes, mechanical tubing and semi-finished products, according to the United States Trade Representative (USTR).

"In light of recent deterioration in market conditions brought on by the COVID-19 pandemic affecting domestic steel producers, the U.S. has deemed it necessary to reduce the remaining quota for Brazilian semi-finished steel products for the remainder of 2020 to 60,000 metric tons, down from 350,000, but will maintain existing quotas for other steel products," USTR said in a release.

The USTR also stated Mexico will establish an export monitoring program for standard pipes, mechanical tubing and semi-finished products through June 1, 2021, and monitor shipments during this period.

USTR did not provide details on how the monitoring program would work but said the arrangement will also maintain Mexico's exemption from Section 232 steel duties.

The U.S. is the world's largest steel importer, importing 26.3 million metric tons during 2019, according to the U.S. International Trade Administration. Brazil represents about 14% of all steel imports from the U.S. and is the second largest supplier behind Canada (19%). Mexico was third, accounting for 13% of steel imports.

Kevin Dempsey, interim president and CEO of the American Iron and Steel Institute (AISI), said the U.S. steel industry "continues to face significant challenges due to the sharp drop in demand this year as a result of the pandemic."

"So far in 2020, raw steel production is down 20 percent compared to the same period last year and steelmaking capacity utilization has only averaged approximately 66 percent this year so far, compared to nearly 81 percent during the same period last year. These difficult conditions make the industry even more vulnerable to surges in imports," Dempsey said in a statement.

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