As prospects fade for avoiding sharp increases in US import tariffs for Brazilian pig iron, Brazilian pig iron producers remain optimistic they can be included in a new list of excluded products subject to new US import tariffs that stand to increase to 37.5 percent later this month.
While Brazilian pig iron currently faces an existing 10 percent import duty, the recent exclusion of the product - deemed essential to US electric arc steel producers- from a US Trade Representative (USTR) list of exempted steel products, could mean the new tariff would put Brazilian pig iron production at a competitive disadvantage.
Fausto Varela, president of Sindifer, Brazil’s pig iron producers’ association, was quoted by local media as saying he is increasingly optimistic the sector can avoid the 37.5 percent US import tariff under the current round of discussions at the USTR. The new tariffs, he said, would put much of the sector’s production on hold, as it currently exports more than 83 percent of its production directly to the US.
According to Varela, while the higher import tariff is likely to apply to a broad range of products, pig iron has a strong chance of being added to the exclusions list, as it had been until recently.
He said support from US customers of the Brazilian product has been helpful, as they oppose the high tariff. Brazil accounts for 60 percent of total US pig iron imports, and these customers believe the tariff could raise costs and hurt the competitiveness of steel produced in the US.
The USTR is expected to announce its final decision on July 15.
