By Brazil Stock Guide — Brazil’s government kept key trade barriers on Chinese steel in place after rejecting a series of appeals from industrial users, while also drawing a line on protection for domestic producers by denying Aperam’s request for higher duties on electrical steel.
The decisions, published on Monday by the Executive Management Committee of Brazil’s Foreign Trade Chamber, known as Gecex, pit steelmakers including Aperam, Usiminas, CSN and ArcelorMittal against large industrial consumers such as WEG and Nidec.
In Aperam’s case, the government rejected a request to revise anti-dumping duties on imports of non-grain-oriented electrical steel, or NGO steel, from Germany, China, South Korea and Taiwan.
Aperam sought stronger protection for domestic production and, among the alternatives it proposed, called for a duty of $350 per metric ton on China’s Baosteel.
WEG, Nidec and machinery industry association Abimaq opposed the request, arguing that higher duties would raise the cost of an input used in motors and compressors and hurt the competitiveness of Brazilian manufacturers.
Gecex decided to keep the existing, lower level of protection adopted on public-interest grounds.
The balance shifted in another dispute.
WEG and Nidec, this time alongside Baosteel, sought to broaden the range of semi-processed NGO electrical steel excluded from anti-dumping duties on Chinese cold-rolled flat steel. The government rejected that appeal as well.
At the center of the dispute is the silicon content used to determine which products qualify for the exemption. Current rules use, among other criteria, a minimum silicon content of 0.6%.
Baosteel and Nidec argued that the threshold should be lowered to 0.3%, saying some semi-processed electrical steels below the current limit do not compete with ordinary cold-rolled products.
Usiminas, CSN and ArcelorMittal opposed the change, arguing that a broader exemption could create a loophole for Chinese imports and make enforcement more difficult.
Gecex kept the existing rules in place. A separate Baosteel appeal challenging its own dumping margin will be reviewed in a different proceeding.
Electronics Industry Appeal Rejected
In a third decision, Gecex rejected an appeal by Eletros, the association representing Brazil’s electrical and electronics manufacturers, against anti-dumping duties of up to five years on coated flat steel imports from China.
Eletros had sought to remove some products from the scope of the measure, including steel thinner than 0.25 millimeter, arguing that equivalent products were not made in Brazil. It also warned that the duties could raise costs for downstream industries.
The government concluded, however, that the absence of domestic production of a specific product is not, by itself, enough to justify an exemption. Authorities must also assess whether the imported product can be substituted by steel made in Brazil.
Taken together, the decisions preserve a substantial part of Brazil’s protection against Chinese steel imports while showing that the government is also weighing the cost of those measures for downstream manufacturers.
In the Aperam case, that balance favored WEG and Nidec. In the other two disputes, the position backed by Usiminas, CSN and ArcelorMittal prevailed.
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