Brazil Reacts To Trump's Steel Tariffs

Mar 9, 2018
Originally published on March 9, 2018 5:43 am
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RACHEL MARTIN, HOST:

President Trump made it official yesterday, signing new tariffs on steel and aluminum imports - despite opposition from many congressional Republicans and free trade advocates. American trading partners, including Canada and Mexico, have been granted temporary exemptions from these tariffs while NAFTA negotiations are happening. But another close U.S. ally, Brazil, got no such break.

(SOUNDBITE OF PROTEST)

UNIDENTIFIED PROTESTORS: (Chanting in Portuguese).

MARTIN: That is the sound of steel workers protesting outside the U.S. consulate in Sao Paulo earlier this week, many of them expressing their frustration about possibly losing their jobs because of these American tariffs. And now Brazil's government is threatening to retaliate. And that could have a major impact on American jobs, particularly in states that voted for President Trump. NPR's Philip Reeves joins us now from Rio de Janeiro to explain this connection and possible fallout.

Hey, Phil.

PHILIP REEVES, BYLINE: Hi. How are you doing?

MARTIN: I'm doing well. So let's start out with the tangible effects of these tariffs on Brazil. What's going to happen there?

REEVES: One hundred thousand Brazilians work in the steel industry. And people here are worried for their jobs. The country's also struggling to get out of the worst recession in its history. And it's just now nudging into growth. A 25 percent tariff on a major export, steel, imposed by an ally is not likely to make that recovery any easier. So Brazil's government's saying it's, you know, gravely concerned by the tariffs. The two countries did about - just under $90 billion worth of trade last year. And Brazil's arguing, you know, that'll be damaged. And they're warning that companies and consumers in both Brazil and the U.S. will suffer.

MARTIN: And Brazil is also the largest importer of American coal. Right? Explain this connection and how it could affect American jobs.

REEVES: Well, the type of coal, called met coal - that's one area that Brazil has warned of consequences. Last year, it imported a billion dollars' worth of coal from the U.S. This is the met coal which they use for making steel here. And it's now...

MARTIN: Wait, so they import American coal to make...

REEVES: Yes.

MARTIN: ...Brazilian steel to sell back to America?

REEVES: It's the best foreign client the U.S. has for this stuff. But it's now hinting heavily that it could look to buy this elsewhere. You know, we all know President Trump campaigned on reviving the coal industry...

MARTIN: Right.

REEVES: ...In the U.S. And the irony that - in Brazil's view at any rate - this could damage that industry is not being lost on people here.

MARTIN: So what does Brazil do? I mean, do they have any leverage to retaliate against these tariffs?

REEVES: Well, the Brazilian government actually is still hoping to negotiate a path out of this. Officials say that Trump's announcement yesterday seemed to suggest that countries might avoid these tariffs, for instance, by introducing voluntary restrictions. They say it was kind of vague. If that doesn't work out, the Brazilians may well file a case, along with other affected countries, at the World Trade Organization, arguing that these tariffs aren't in line with agreements.

But don't let's forget one thing, though. Brazil's the largest country in Latin America, and it's not an easy country to do business with. There are often many restrictions and an unbelievable amount of red tape. The U.S. has been urging the Brazilians to open up and, in fact, got a victory this week with an agreement that opens the path to more air travel. And some people here are pointing out that these tariffs play into the hands of those Brazilians who are against liberalizing Brazil's economy. And that's bad for everyone.

MARTIN: NPR's Philip Reeves from Rio de Janeiro this morning.

Hey, Phil, thank you so much for that. We appreciate it.

REEVES: You're welcome. Transcript provided by NPR, Copyright NPR.