Posted on 15 Jul 2025
The US decision to impose a 50% tariff on Brazilian products potentially will have a significant operational impact on the country’s mining and steel sectors, according to the Instituto Aço Brasil (IAB) and the Brazilian Mining Institute (Ibram).
Marco Polo de Mello Lopes, president of IAB, describes the move as a politically motivated escalation that risks disrupting critical trade negotiations between the two countries, Kallanish notes.
“This escalation undermines negotiations that were advancing to renew the 2018 agreement when President Trump first imposed a 25% tariff on steel,” Lopes states. He urges Brazilian diplomacy to maintain dialogue to safeguard access to the US market.
He clarifies that the measure affects general tariffs, noting, “for steel specifically, the 50% duty was already in place, so practically nothing changes. We do not believe this is a cumulative tariff.”
Despite trade barriers, the US remains one of Brazil’s main buyers of steel products, due to its limited self-sufficiency in finished steel. Lopes warns that further restrictions could force a reconfiguration of global trade flows.
Ibram emphasised that the mining sector will be hit hard as well. The US is Brazil’s 12th-largest importer of iron ore and accounts for about 4% of Brazil’s mineral exports.
“By including raw materials in this tariff policy, the US has taken a surprisingly negative step,” Ibram states. “This forces Brazil to seek new partners and potentially abandon a long-standing, mutually beneficial trade relationship.”
Ibram highlights that Brazil’s mining sector represents 47% of the country’s trade surplus and has announced $68.4 billion in planned investments through 2029, an outlook that could now be revised downward due to the tariffs.
The external cost pressure comes on top of Brazil’s already high domestic taxes on mining, which are among the highest globally. The new tariffs may further erode Brazil’s competitiveness in international markets.
The country’s installed mining and processing capacity, including 55 million tonnes of annual pellet production, was designed for global exports, including the US. Now, underutilisation risks loom large. Pig iron producers and integrated steel mills may be forced to adjust product mixes, secure alternative markets, and overhaul logistics, incurring higher costs and inefficiencies in the short term.
Estimated annual losses for the Brazilian mining sector could reach $2.2 billion, with the impact on the steel industry of $1.5 billion.
“These losses go beyond lost sales,” Ibram notes. “They also include the underuse of assets built for larger scales and the cost of rerouting volumes to markets that may pay lower prices and require more expensive logistics."
Source:Kallanish
