The US Trade Representative’s office (USTR) has announced that it will reduce Brazil’s 2020 quota for semi-finished steel from 350kt to 60kt as a result of market deterioration caused by the COVID-19 pandemic. There are also plans for Mexico to establish a strict monitoring regime to tackle surges in steel pipe, mechanical steel tubing and semi-finished exports to the US, according to a news report from Reuters.

Brazil originally agreed to the quota system to avoid US President Donald Trump’s 25% Section 232 tariffs. The USTR will maintain existing quotas for other steel products made in Brazil.

Consultations concerning Brazil’s 2021 quota will take place in December.

The monitoring deal with Mexico is aimed at preventing the transhipment through Mexico of steel pipe, tubing and semi-finished steel from China and other nations.

Kevin Dempsey, interim president and CEO of the American Iron and Steel Institute (AISI) commented: “We appreciate the efforts of the Administration to address steel import issues affecting American producers during this difficult time when the market for steel has declined significantly due to COVID-19. While we are seeing some modest recent improvement in market conditions, the industry continues to face significant challenges due to the sharp drop in demand this year as a result of the pandemic. So far in 2020, raw steel production is down 20 percent compared to the same period last year and steelmaking capacity utilization has only averaged approximately 66 percent this year so far, compared to nearly 81 percent during the same period last year. These difficult conditions make the industry even more vulnerable to surges in imports. We are grateful to the president and his team for their ongoing commitment to working with the steel industry to tackle the trade challenges facing the industry.”