Brazil calls for dialogue with US on trade, suggests steel quotas

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BRASILIA (Reuters) – Brazil’s Vice President Geraldo Alckmin on Wednesday called for “caution” and said the South American country would seek dialogue with the United States after President Donald Trump’s decision to impose a 25% tariff on steel and aluminum imports.

Speaking to reporters in Brasilia, Alckmin said that Brazil was open to dialogue and would reach out to the Trump administration. He suggested that quotas could be a good alternative.

The South American country is one of the largest sources of U.S. steel imports, but Alckmin highlighted that overall the U.S. runs a trade surplus with Brazil, saying that it meant Latin America’s largest economy was “not the problem”.

Trump, who took office last month for his second non-consecutive term, first targeted steel and aluminum for tariffs in 2018 under a Cold War-era national security law.

But he later granted several countries exemptions, including Canada, Mexico and Australia, and struck duty-free quota deals for Brazil, South Korea and Argentina based on pre-tariff volumes.

“In the past, when tariffs were increased quotas were set. That’s a smart mechanism,” said Alckmin, who also serves as President Luiz Inacio Lula da Silva’s minister of development, industry and trade.

The United States has run a trade surplus with Brazil since 2008, which reached $253 million last year on more than $80 billion of bilateral trade.

Brazilian steelmakers lobby group Aco Brasil on Tuesday had already said it was surprised by Trump’s tariffs and that such measure would not benefit either of the countries.

(Reporting by Lisandra Paraguassu; Writing by Isabel Teles; Editing by Gabriel Araujo and Nick Zieminski)