Key View: Few months onward from the imposition of tariffs on metals imported into the US, we look at the implications and impacts on various stakeholders. As trade war rhetoric between the US and China continues to escalate, uncertainty surrounding trade flows and metal prices presses on, with more negotiations and discord expected over the coming months.
In this article we identify the impacts on the metals markets of the US tariffs imposed since April 2018 on steel and aluminium imports on a large number of suppliers:
Regarding the impact on the US metal sector, the tariffs will continue to benefit steel producers solely, while causing financial woes for aluminium producers who import alumina (also facing tariffs).
Consumers of steel and aluminium in the US will continue to be negatively affected with rising costs, coupled with chaos surrounding the application of waivers. Approximately 20,000 waiver applications have been submitted by companies in the downstream sector so far, causing delays and further uncertainty in the sector.
So far all major steel and aluminium suppliers to the US now face either tariffs or a new quota-based system limiting import volumes.
The situation remains uncertain at this point, as the US is still reportedly negotiating with some countries, most notably the EU. This will most likely lead to upcoming changes to the list of countries impacted by tariffs.
US - Imports Of Steel (LHC) & Aluminium (RHC) By Country, % Of Imported ValueNote: Includes Aluminium and Aluminium products (HS code 76) and Steel and Steel products (HS code 72, 73), in line with the Commerce Department Investigation.
As per President Trump's decision, the US Customs and Border Patrol began collecting the tariffs of 25% on steel and 10% on aluminium starting on March 23. Canada and Mexico were briefly granted exemptions from the tariffs but with the NAFTA renegotiation falling through, the countries lost their exemptions starting June 1, along with the EU. At the time of writing, only South Korea, Australia, Brazil and Argentina have permanent exemptions from the tariffs. Even then, South Korean exports of steel to the US is subject to a quota of 2.7mntpa, 30% less than its yearly average during 2015-2017. Brazil's exports are also now subject to a new quota-based system. Recent talks between the US and the EU in July have centred around a complete removal of the tariffs, but so far there has been no progress on the matter and uncertainty over it remains elevated.
As of July 31:
All steel mill and aluminium articles imported into the US face import tariffs of 25% and 10%, respectively, or quotas based on the country of origin, not country of export.
All steel mill articles from all countries of origin except Argentina, Australia, Brazil, and South Korea face import tariffs of 25%.
All aluminium articles from all countries of origin except Argentina and Australia face import tariffs of 10%.
All steel mill articles from Argentina, Brazil, and South Korea face absolute import quotas.
All aluminium articles from Argentina face absolute import quotas.
Argentina To Continue To Benefit, EU Gains Cut Short For Now
US Steel Imports By Origin (% chg y-o-y)
Contact Person: Mr. Olen Yu
Tel: 86-27-8544 8800