Published by Global Banking and Finance Review
Posted on February 10, 2025
MEXICO CITY/SAO PAULO (Reuters) - Brazil and Mexico, two top shippers of steel to the U.S., will wait to see if U.S. President Donald Trump announces tariffs on steel and aluminum imports before reacting, officials from both nations said on Monday.
Trump is expected to introduce new 25% tariffs on Monday on all steel and aluminum imports into the United States, on top of existing metals duties, in another major escalation of his shake-up of trade policy.
Nearly a quarter of all steel used in the U.S. is imported, and Trump has vowed to revive domestic output after U.S. firms have idled mills in recent years.
Mexican President Claudia Sheinbaum said in a press conference on Monday that her administration was going to "wait to see if anything is announced today, and from there we'll make a decision."
Meanwhile, Brazil's finance minister, Fernando Haddad, said that the South American nation's government would "only make statements at the appropriate time and based on concrete decisions, not on announcements that could be misinterpreted or revised."
Haddad made the comments after a local newspaper reported that Brazil could impose taxes on U.S. tech companies in retaliation for steel tariffs. Haddad called the report "not correct."
In his first term, Trump imposed tariffs of 25% on steel and 10% on aluminum, though Brazil and Mexico were among the countries later exempted from them. Some of the region's top steel firms heavily serve the U.S. market.
Ternium, which shipped a record 4.1 million metric tons of steel in Mexico in the third quarter, counts U.S. automakers building cars in the country among its top clients. It is building a new plant in northern Mexico to meet steel requirements under Mexico's trilateral trade agreement with the U.S. and Canada.
New York-listed shares of Ternium were up 0.8% on Monday afternoon. Shares of Ternium-controlled Usiminas climbed around 2% in Brazil trading, with only a small percentage of its steel shipments heading abroad.
Brazilian steelmaker Gerdau stands to benefit from the tariffs, as it operates 11 production units in the U.S. and Canada. Its shares jumped more than 4%.
'DUMPING' FROM CHINA
Steel industry leaders worldwide have in recent years accused China of engaging in a practice known as "dumping," in which it sells surplus steel abroad at below-market prices.
Both Brazil and Mexico in recent months have slapped Chinese steel imports with double-digit tariffs in a bid to curb the practice, though Brazilian steelmakers have called for even higher taxes to be implemented.
Trump has accused Mexico of acting as a back door for Chinese trade to the U.S. Officials in the administration of President Joe Biden, Trump's predecessor, made similar accusations regarding Mexico's steel shipments, arguing it was possible they had originated in China.
Mexico's economy ministry last week rolled out a mechanism to better track steel imports and exports as well as their countries of origin.
(Reporting by Gabriel Araujo and Isabel Teles in Sao Paulo and Kylie Madry in Mexico City; Editing by Mark Porter, Sharon Singleton and Matthew Lewis)
