Mining, metals supply chains concerned over US-Brazil tariff battles

Brazilian metals producers are worried about the impact of the US and Brazil trade conflict on the mining, steel and aluminum industries.

US President Donald Trump threatened a 50% tariff on Brazilian imports in a letter sent July 9 and Brazilian President Lula proposed a retaliatory 50% tariff on US imports.

Brazil is the second-biggest steel exporter to the US, and the largest iron exporter. Brazil's iron and steel exports, including pig iron, to the US were worth $5.72 billion in 2024, according to the UN's Comtrade database.

At the same time, Brazil is a major importer of US coal, mainly metallurgical coal, for steelmaking. According to Brazilian mining institute Ibram, the US supplied 45.5% of Brazil's coal imports in Q1, out of a total 3.72 million mt imports of the product in the quarter.

Brazil also imported 17.9% of its Q1 sulfur requirement of 642,450 mt from the US, Ibram said. Sulfur is used in fertilizers -- another area where Brazil is deficient -- and other industries.

Brazil's total imports of mineral goods from the US in Q1 amounted to 20.8% of the quarter's total mineral import, worth $1.65 billion, Ibram data showed.

Brazil's Q1 mine product exports to the US included iron ore, bauxite, niobium, gold, kaolin, and ornamental and other stones.

Brazilian mining giant Vale exports very little to the US. The company's exports to the US form only 3% of its revenue, coming mainly from the sale of base metals produced in Canada, Vale said in a July 10 email.

Brazil's steel and aluminum sectors have already had 50% tariffs imposed on their sales to the US, effective June 4, under the US' Section 232 Trade Expansion Act.

"Brazilian and US industries have maintained a mutually beneficial, complementary relationship for decades," Brazil's Foreign Ministry stated at the time Section 232 tariffs were announced, citing 2024 trade figures. "Brazil is the third-largest importer of US metallurgical coal ($1.2 billion) and the largest exporter of semi-finished steel to the United States ($2.2 billion, representing 60% of total US imports). Semi-finished steel is an essential input for the U.S. steel industry itself."

Aluminum concerns

Brazilian aluminum association Abal said in a July 10 statement it is "deeply worried" by the new US tariffs announcement, which brings heightened uncertainty and "increases Brazil's exposure to trade distortions and diversions.... in a scenario of increasing protectionism."

The Trump administration issued an executive order in April that prevents "stacking" of tariffs, and products like aluminum and steel will not see a combined tariff, though Abal was uncertain about how the tariffs would combine.

The association said that Brazil's aluminum products exports already fell around 25% on year in the first half of 2025, "as a direct consequence of the tariffs announced on March 12 and June 4," and reinforced its calls for a measured diplomatic and commercial response" to the current situation.

More than 90% of the primary aluminum produced in the US may use Brazilian raw materials including bauxite and alumina, Abal added.

Brazil's National Industries Confederation said it considers the US' imposition of a 50% tariff is completely "unjustifiable" because the US is Brazil's third-biggest trade partner and has enjoyed a trade surplus with Brazil for the last 15 years.

The tariff escalation is widely viewed as political due to Trump's mention of a "witch-hunt" against former Brazilian President Jair Bolsonaro, currently standing trial in Brazil on accusations of leading an coup attempt against the current government.

Brazilian government data released in recent days shows that in H1, Brazil's overall exports to the US grew 4.4% on year to reach $ 20.02 billion, while Brazil's imports from the US grew 11.5% to $21.70 billion.

Brazil's H1 steel products exports to the US grew 15.87% on year in value terms to $1.95 billion, despite the March 12 and June 4 tariffs impositions, while iron products exports grew 1.79% to $865.7 million.

Brazil's imports of US oil, coal and aircraft products all grew markedly during H1, the data showed.