Gerdau, one of the biggest steelmakers in Brazil, is reducing its investments in Brazil due to the government's lack of trade defense to block subsidized steel from China.

In fact, Gerdau has already closed a plant in Minas Gerais while operating other plants in the county at the limit of their idle capacity. It has made 1,500 layoffs during the first half of this year, and if the volume of imported steel continues to grow in the domestic market, the company could be forced to make more layoffs and operational adjustments, according to Gustavo Werneck, Gerdau's CEO.

The share of imported steel in Brazil's domestic steel consumption was 22.8% in January of this year, but then grew to 27.2% in May. At the same time, Gerdau is concerned about the impact of the 50% tariffs that the US is imposing against Brazil on Gerdau's customers in the machinery and automotive sectors; therefore, the company has decided to reduce investments in Brazil.