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Final Thoughts

Written by Michael Cowden

The US International Trade Commission (ITC) has voted to remove duties on Brazilian hot-rolled coil, cold-rolled coil, and plate.

Once might be a coincidence. But three times? That’s a trend.

The question now: Is this a big-picture shift in US trade policy toward Brazil? Or is it instead more a matter of inside baseball at the ITC?


It’s worth asking because Brazil shipped ~2.52 million short tons (~2.29 million metric tonnes) of steel to the US in 2022, according to Commerce Department figures.

That makes Brazil one of the largest foreign steel suppliers to the US behind only Canada and Mexico, our USMCA trade partners, and South Korea. (More on South Korea in a moment.)

I talked to a few DC folks well plugged in on trade policy matters. My impression is it’s mostly a matter inside baseball. In particular, differences of opinion on the impact of the Section 232 tariffs and quotas implemented by the Trump administration and continued by the Biden administration.

Section 232 Status

One takeaway: Countries that remain subject to traditional antidumping (AD) and countervailing duties (CVD) are also subject to the Section 232 national security tariffs of 25%. China and Turkey, for example, when it comes to finished steel products such as plate.

Another takeaway: Countries subject to tariff-rate quotas (TRQs), or soft quotas, also remain subject to traditional AD/CVD orders. In the plate case, Japan and EU countries such as Germany and France are examples of this. Recall that those nations agreed to TRQs, which significantly scaled back S232 national security tariffs on allies who had chafed at the notion that their imports somehow posed an existential threat to the US.

The general rule: The ITC thinks you should remain subject to duties if you’re still subject to Section 232 or if you’ve agreed to a TRQ. Right?

Not so fast. Brazil is notable in that it agreed to an absolute quota, or hard quota, in exchange for exemption from Section 232 tariffs. But South Korea also agreed to an absolute quota. So why is Brazil being treated more favorably?

The Tons and the Mix

Is it possible that Brazil is being rewarded for being more supportive of the 232 quota system? Perhaps. But I think it’s more likely a matter of the vastly different nature of imports from Brazil and South Korea.

The vast majority or Brazilian exports to the US are semi-finished goods rather than finished steel products such as sheet and plate.

Brazil shipped 1.75 million short tons of slab to the US in 2022 and 340,374 tons of other semi-finished goods such as billet. The Latin American nation sent only about 190,000 tons of flat-rolled steel to the US last year, most of it coated products.

That’s no accident. Brazil’s annual quota is heavily titled toward slab. Brazil has permission to ship 3.87 million tons of slab to the US in 2023, according to quota limits from US Customers and Border Protection. Its quota limit for cut-to-length plate, in contrast, is a measly ~10,000 tons.

South Korea has an annual quota limit of 223,251 tons for cut-to-length plate. It’s similar for other finished steel products. Brazil’s annual quota limit for hot-rolled sheet is approximately 120,000 tons. South Korea’s is nearly four times that at roughly 446,000 tons.

In short, there is not much room for Brazil to send huge volumes of finished goods to the US. South Korea can send a lot more finished steel to the States. That means imports from South Korea can have a bigger impact on the US finished steel market, and that’s why AD/CVD orders on Korean products remain in place.

Only Five Commissioners

That’s not to say that everyone on the International Trade Commission agrees with that logic. The vote on Brazilian plate was 3-2 in favor of allowing the duties to lapse. It was the same story with hot-rolled and cold-rolled coil.

Veteran ITC watchers might be quick to point out something unusual. The ITC typically has six commissioners. And domestic mills, per statute, win a tie. But ties are less likely with only five commissioners.

So why are there only five commissioners instead of the usual six? Because the Biden administration, like most administrations, prioritizes getting federal judges and key roles in bigger agencies confirmed by the Senate. The ITC, while important to steel, is on the back burner when it comes to the broader political landscape.

Does this mean the case is closed on duties on Brazilian products? I don’t think so. Notably, Cleveland-Cliffs has appealed the ITC’s decision on Brazilian cold rolled. I won’t get into the weeds on “cumulation” and other trade policy jargon. But I think the Cleveland-based steelmaker could make the case that imports should be treated collectively, not just on a nation-by-nation basis. So that’s a case to watch going forward.


You might have noticed that I haven’t mentioned coated products from Brazil. Some of you in the domestic galvanized and Galvalume markets might be wondering why, especially if you face import competition from Brazil.

Recall that a wave of trade cases were filed in 2015-16 against imports of hot-rolled, cold-rolled, and coated sheet, as well as plate. Each case was larger than the one before it.

Brazil was targeted in the hot-rolled, cold-rolled, and plate cases. The coated case, launched in the summer of 2015, was the first of the landmark trade petitions.

That case went after imports from China, Korea, India, Italy, and Taiwan. Because Brazil wasn’t part of that case, there are no duties on Brazilian coated to review or remove now.

By Michael Cowden,

Michael Cowden

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