Brazil to handle with care U.S. tariff threat: Temer

SAO PAULO (Reuters) – President Michel Temer said on Wednesday that Brazil will respond with caution to planned U.S. tariffs on steel and aluminum to avoid hurting ties with its second-largest trade partner.

But if talks fail, the president emphasized, Brazil will not hesitate to take a complaint to the World Trade Organization.

Temer urged Brazilian steel producers and their U.S. clients to work together in lobbying the U.S. government and Congress to modify the tariffs announced last week by President Donald Trump.

“We have to treat our relations with the United States with great care, because they are our biggest trade partner after China,” Temer said, speaking at the opening of the World Economic Forum on Latin America.

If there is no “friendly” solution. Brazil will join other countries in filing a complaint at the WTO.

Foreign Minister Aloysio Nunes said at the same event that he has written to the U.S. Trade Representative requesting a meeting on the tariffs.

The government said last week the tariffs will strongly hamper Brazilian exports to the United States and are incompatible with U.S. obligations toward the WTO.

Brazil said it would not rule out retaliation if the WTO ruled against the U.S. tariffs.

U.S. coal producers that export coal used to make Brazilian steel are one potential ally in lobbying for an exemption.

Brazilian steelmaker Companhia Siderurgica Nacional SA (SA:), which sells 6 percent of its output in the U.S. market, shrugged of potential tariffs on Wednesday and said it would sell more on the domestic market as Brazil’s economy picks up, and look to export more to China.

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