US tariff hike: pig iron importers suspend contracts with Brazil

Brazilian producers of pig iron — the raw material for steel — are watching with apprehension the approaching start of 50% tariffs on Brazilian products imported into the United States, scheduled for Friday (1st).

With less than a week to go before the deadline set by Donald Trump , North American importers of the material have already announced the suspension of contracts with suppliers in Brazil, says Fernando Varela, president of Sindifer (Union of Metallurgical and Electrical Material Industries of the State of Espírito Santo).

Although order cancellations are not yet on the table, Varela emphasizes that business owners are facing the approaching deadline and the lack of resolution with fear and tension.

"The day is approaching and so far no concrete negotiation action has been seen on the part of the government," he highlights.

Experts point to the lack of interlocutors in the White House as a major challenge for the federal government . Since Trump announced the 50% tariff hike on July 9, there has been little progress in maintaining a direct line of communication between Brasília and Washington.

Among high-ranking members, to date, there has only been one conversation between the Vice President of the Republic, Geraldo Alckmin, and the US Secretary of Commerce, Howard Lutnick, on the 19th .

Finance Minister Fernando Haddad himself admits to difficulties in communicating with his American counterpart, Treasury Secretary Scott Bessent. According to Haddad, communication between the U.S. Treasury and the Ministry of Finance currently occurs only at a technical level .

Producers from various sectors are already mobilizing in search of new markets. The outlook for the pig iron sector, however, is pessimistic, Varela points out, classifying it as "practically impossible" to find new buyers in the short term and "difficult" in the longer term.

If tariffs were to start on Friday, the president of Sindifer sees a very negative scenario.

" Most industries will halt activities, some will put staff on leave or use temporary measures, but the majority, due to a lack of prospects, will lay off staff," he says.

The US has already imposed a 50% tax on steel imports since the beginning of June . Brazil is the second-largest supplier of steel to the United States, behind only Canada.

In 2024, Brazil sold 14.9% of the entire group, which includes steel and iron as raw materials. Never before has the country had such a large share of that market.