Brazil Opts for Negotiation Over Retaliation in U.S. Steel Tariff Dispute

Finance Minister Fernando Haddad announced that Brazil will not retaliate against new US steel tariffs, following President Lula’s direct instruction to pursue negotiations instead.

Haddad made this statement after meeting with steel industry representatives on Wednesday, March 12, 2025. “President Lula told us to stay calm at this moment,” Haddad said. “We have negotiated under more unfavorable conditions before.”

The 25% tariff imposed by the United States significantly impacts Brazil as the second-largest steel exporter to the American market. Brazil shipped 3.4 million tons of steel to the US in 2024, generating approximately $5.7 billion for the Brazilian economy.

The tariffs, which took effect Wednesday, revoke a 2018 agreement that had allowed Brazil to export steel under a quota system rather than face tariffs. That earlier arrangement permitted Brazil to ship 3.5 million tons of semi-finished products without additional costs.

Haddad rejected US accusations that Brazil re-exports imported steel to America. “We export semi-finished products and import finished products,” he explained. “The accusation makes no logical sense.”

Brazil’s Response to US Steel Tariffs

Brazil’s Finance Ministry now plans to prepare technical arguments to support negotiations led by the Ministry of Development, Industry and Trade. Vice President Geraldo Alckmin, who heads this ministry, will spearhead talks with US officials.

The steel sector employs approximately 121,000 Brazilians, with operations concentrated in Rio de Janeiro and Minas Gerais states. Industry representatives have requested government protection against imports as well, particularly from China.

“The steel sector wants measures for both imports and exports,” Haddad noted. “The strategy differs because exports require negotiation while imports need unilateral defense.”

Haddad also pointed out that these tariffs harm American consumers through higher prices. The Brazilian government remains committed to resolving the dispute through diplomatic channels while preparing strong technical arguments to defend its vital steel industry.