232 Tariffs Continue
Trump extended the exemption until June 1st for several countries. Remember that there is no way to get a new order placed and delivered to the US within this time frame so that only affects steel that’s been on order for a while now.
The tariffs are very real, we have paid them on inbound steel already and more is on the way that have tariffs being added.
I’m seeing that the countries that are being exempted are pricing their steel at levels just under domestic production without any tariff and stating that if a tariff were applied it would be added. The current non-exempt countries are giving their prices with the tariffs already included into the price and still pricing is just below domestic production.
So it really makes the most sense to buy from a non-exempt country for any foreign deals right now since the risk of an additional tariffs has been mitigated.
Things are still settling down and there will be a level found at some point over the next few months. Until then we continue to buy and sell steel, watch and make the best decisions we can with the information we have.
232 Only Partial Solution For Steel Industry
Section 232 tariff will help slow global steel overcapacity and raise domestic production. But industry executives say it is only one step in doing so.
Another way to slow global overcapacity is by slowing transshipments, which are used to work around tariffs. Curbing transshipments is important to level the playing field.
The AMM reports, “Meanwhile, other factors outside of the tariff are helping to boost the domestic steel industry, including the US tax bill, robust demand and fewer regulations, industry executives agreed.”
“Industry executives were quick to point out that while a combination of factors have been propelling the domestic steel industry, the tariff has played a critical role.”
The tariffs have helped to encourage more negotiating. For instance, now quotas are considered a good solution. So the tariffs have worked to “create a more negotiated system.”
“Even with the 25% Section 232 tariff on steel imports in place, the US will continue to rely on imports.” States the AMM.
But the United States suffers when steel is imported unfairly. One reason the US has become dependent on steel imports is because the domestic steel industry can’t compete with China. Their low wages and low pollution controls, in addition to government subsidies, help create overproduction.
The Section 232 tariff can help to make the global steel industry more accountable to fair trading.
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