25/03/13
US steel tariffs may prove import equalizer
Houston, 13 March (Argus) — The removal of steel import quotas and nontariffed
systems by the US, even as President Donald Trump reimposes steel tariffs, may
help level the international playing field, allowing countries that have been
unable to compete for years in the US steel market a chance to sell steel into
the country. Buying interest for steel imported to the US from countries that
have not been able to be competitive for years has grown in recent weeks. US
buyers told Argus that skyrocketing US prices — combined with the reimposition
of 25pc Section 232 steel tariffs on countries with tariff rate quotas (TRQs)
and non-tariffed steel — has reopened some markets. The 25pc 232 tariffs have
been in effect since March 2018, but many countries have received exemptions and
TRQs, with 80pc of US steel imports coming from these excluded countries and not
incurring the 25pc tax, according to US Department of Commerce data. The
equalizing of the trade barrier to cover all imports could allow countries like
Turkey — which used to be a major source of imported steel into the US — to
restart some trade flows to the country, as global prices remain at a wide
discount to US prices. Domestic buyers want imports US service centers
interested in diversifying their purchases with lower-priced foreign steel and
importers interested in selling the material said wide deltas between US steel
prices and imports made imported offers from at least a half dozen countries
more attractive over the last few weeks. The Argus US hot-rolled coil (HRC)
Midwest and southern assessments both rose week on week by $15/short ton (st) to
$935/st on 11 March, while the HRC import assessment jumped by $80/st to $800/st
DDP Houston, Texas. The wide spread between domestic and import prices serves as
motivation for US buyers to purchase imported steel. Tens of thousands of tons
of cold-rolled coil (CRC) and HRC from Turkey may begin to flow into the US,
according to some buyers. Prior to the original imposition of the 25pc 232
tariffs, Turkey exported 1.98mn metric tonnes (t) of steel products to the US in
2017. Since tariffs were implemented volumes have plummeted, reaching only
391,400t in 2024, according to the Commerce Department. Other buyers have
recently reported purchasing South Korean HRC imports, after that country's
mills spent months considering pricing as they awaited clarity on whether the
country — which used to have TRQs — would be granted exemptions by Trump. So far
Trump has not granted any country exemptions from the reinstated 232 tariffs.
Tons from Turkey and South Korea are expected by mid-year. HRC import bids were
also heard from mills in Australia, Brazil, Egypt, and Vietnam — countries that
had not been active into the US for HRC in many months. Trade policies concerns
abound A concern for US steel importers is that Trump could rapidly change his
trade policies and add new tariffs to imports, increasing the duty costs when
steel arrives. Such risks have reared their heads over the last two weeks with
back-and-forth tariff spats between the US, Canada and Mexico. To mitigate the
risk, most buyers have booked less than they otherwise would, though many
believe there will be a rise in some import volumes come mid-2025. Steel imports
from countries without tariffs or with TRQs made up 80pc of the 26.2mn t (28.9mn
st) of total steel products imported in 2024. In 2017, the year before tariffs
were imposed, approximately 70pc of total steel imports came from those
countries, according to US Department of Commerce data. With this latest round
of 232 tariffs, Trump appears less likely to negotiate new TRQs or exemptions,
with the tariff exclusion mechanism that allowed companies to file to have
specific products not taxed no longer active. Countries like Australia and Japan
were reportedly denied new exemptions in recent negotiations, even as both
countries had nontariffed mechanisms in place under the prior scheme. Domestic
companies, particularly steelmakers, can and have filed to have tariffs placed
on steel derivative products, which opens up a whole new class of products to
the risk of having 25pc tariffs placed on them as Trump attempts to bring
manufacturing back to the US. By Rye Druzchetta US steel imports by country t
Country 2024 2023 2018 2017 Canada 5,952,054 6,248,393 5,646,641 5,675,816
Brazil 4,080,695 3,576,002 3,984,681 4,665,428 Mexico 3,194,752 3,799,057
3,498,308 3,155,117 South Korea 2,548,877 2,392,320 2,507,860 3,401,405 Vietnam
1,237,055 508,232 1,006,702 679,129 Japan 1,070,681 1,078,222 1,370,406
1,727,844 Germany 975,878 947,322 1,253,356 1,380,434 Taiwan 917,760 525,685
966,393 1,128,356 Netherland 556,877 460,678 556,515 636,900 China 470,197
553,406 649,138 763,036 Turkey 391,444 283,198 1,045,592 1,977,866 Russia 0 4
2,296,781 2,866,695 Total 26,224,660 25,583,087 30,573,529 34,472,507 US
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