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Brazilian officials were holding their breath on Monday after US President Donald Trump pledged to impose blanket 25% tariffs on all US and aluminum steel imports. If enacted, Brazil could become a prime casualty of Trump’s move given the country exports 48% of its steel output and 16% of its finished product to the US. Nevertheless, the country’s finance minister Fernando Haddad struck a cautious tone following Trump’s announced on Sunday, saying the government will evaluate the tariff measures only once they have been published. The finance ministry denied reports that Brazil plans to retaliate by implementing a tax on major US tech firms. Trump’s announcement affected Brazilian steel stocks to varying degrees. Shares in steelmakers CSN and Usiminas, the main potential casualties of US tariffs, initially lost ground on Monday morning but later bounced back, with some equity analysts saying Trump’s measures may only have a short term impact. CSN closed up 1.8% at BRL9.10 on the São Paulo stock exchange, and Usiminas rose 2.1% to BRL5.72. Meanwhile, Gerdau, which owns several steels plants in the US, could stand to gain from the tariffs. Its shares closed up 5.6% at BRL17.6. “Should there actually be a tariff increase of such magnitude, this is positive news for local producers, including for Gerdau,” according to Itaú equity analysts.
