Brazil Urged to Bolster Steel Import Safeguards Amid Global Trade Shifts

Brazil's steel industry is facing significant challenges, with calls intensifying for the government to strengthen its import safeguards. Domestic producers and industry associations warn that a surge in steel imports, largely from Asia, is threatening local production and investment. This pressure is exacerbated by global trade imbalances and new protectionist measures adopted by major economies like the European Union.

Rising Imports and Domestic Industry Strain

The Brazilian Steel Institute (Aço Brasil) and major steel producers, including Gerdau Group, CSN, Usiminas, and ArcelorMittal Brasil, have voiced strong concerns over the influx of foreign steel. Imports of steel products into Brazil grew by 18.6% in 2024 compared to 2023, reaching 6 million metric tons. This trend continued into 2025, with a 27.5% year-on-year increase in the first four months, totaling 2.2 million metric tons. These imports now account for up to 25% of domestic market sales, with some reports indicating they erode approximately one-third of Brazil's domestic steel market. This surge has left Brazilian steel mills operating at around 65% capacity, leading to idle furnaces and unsustainable fixed costs. André B. Gerdau Johannpeter, chairman of Gerdau, described 2025 as 'the most turbulent year for Brazilian steel in decades,' warning of the potential 'complete demobilization of our national steelmaking chain' if trends continue.

Global Factors Driving the Influx

The primary driver behind the increased imports is global steel overcapacity, particularly from China, whose steel exports more than doubled since 2020, reaching 118 million tons in 2024. This oversupply is being diverted to markets with fewer trade barriers. Furthermore, new trade policies, such as the European Union's Carbon Border Adjustment Mechanism (CBAM), are reshaping global steel trade flows. The CBAM, set to be fully effective from 2026, imposes a carbon fee on imported steel, potentially reducing EU imports from carbon-intensive producers and redirecting those volumes to other regions. The EU has also proposed a reform of its steel import safeguard system, including a 47% cut in tariff-free quotas and a 50% ad valorem duty.

Current Measures and Calls for Stronger Action

In response to industry pressure, Brazil's foreign trade body, Gecex, renewed and expanded an existing import control system on May 27, effective May 31, for a period of one year. This system applies a 25% import tariff once quotas for selected steel products are filled. The number of covered product categories was expanded from 10 to 14, now encompassing a total of 23 product types. Initial tariffs for imports within quotas range from 9% to 16%. However, Brazilian steel producers have largely deemed these measures insufficient. They argue that the existing tariff and quota system is ineffective, with some suggesting that Chinese exporters can offset the tariffs through discounts. Industry leaders are advocating for more 'efficient' commercial defense measures, including definitive anti-dumping actions, to adequately protect the domestic market. Jorge Gerdau emphasized that Brazil has not yet reached the protection levels implemented by developed Western economies.