Financial report says tariffs may be good for U.S. steel and aluminum producers, but have not deterred subsidized Chinese production.
Hilco Valuation Services
08/13/2019
Editor’s Note: The following excerpts are from a report titled “The Evolving Story of Steel and Aluminum Tariffs” produced by Michael Sullivan of Hilco Valuation Services, a subsidiary of Hilco Global, an international financial services company. For the full report, visit the News page at hilcoglobal.com.
Background Highlights from the Report
- On March 1, 2018, the current U.S. administration announced its intention to impose a 25 percent tariff on steel and a 10 percent tariff on aluminum imports.
- The tariffs imposed between March and May of 2018 fell under Section 232 of the Trade Expansion Act of 1962. The section 232 tariffs originally excluded the two largest trading partners for steel products for the U.S.: Mexico and Canada. In 2018, these two countries imported 5.6 million tons and 3.5 million tons of steel products into the U.S., respectively, as comparted to 5.7 million tons and 3.0 million tons in 2017.
- Fearing circumvention, tariffs were ultimately applied to both Mexico and Canada and remained in effect until May 17, 2019, when President Donald Trump announced that they would be rescinded as part of the larger U.S.M.CA agreement.
- The tariffs were far reaching and applied to both semi-finished goods such as steel plate, which is used for fabrication into other products, as well as finished products like steel pipe and rebar that are used as-is.
- The largest importers of steel products are Canada, Brazil and Mexico. China remains a major force in the export market either directly or indirectly via transshipment through other countries.