New Steel Duties: Can a Trade War be Avoided?
Earlier this year, US President Donald Trump sparked fears of a trade war when he announced plans to impose new tariffs on steel and aluminium. Despite the many warnings from concerned parties across the globe, the White House has now put these levies in place in Mexico, Canada and EU countries, which had previously been granted exemption from the duties.
The new tariffs are particularly high, with 10% being imposed on aluminium and a massive 25% on steel. This has caused global concern and has already caused retaliation from the Canadian government, with other countries set to follow suit.
Canada immediately responded to the new steel and aluminium tariffs by announcing new duties on goods from the US. Prime Minister Justin Trudeau branded the decision as 'totally unacceptable' and 'an affront to the long-standing security partnership between the US and Canada'.
The International Trade Secretary for the UK, Dr Liam Fox, was quick to dismiss the US claims were necessary for security reasons. He said that the tariffs were 'patently absurd protectionism' and warned that 'tit-for-tat' action by the UK was possible by saying that 'counter measures are absolutely not ruled out'.
A spokesperson for the UK government said that it was 'deeply disappointed' by the new tariff impositions and believed that 'permanent and full exemption' should be granted to the UK as close allies of the US. Gareth Stace, the Director of UK Steel, warned of an imminent 'damaging trade war' and said, "President Trump had already loaded the gun and today we now know that the US administration has unfortunately fired it."
Further complicating the issue is the possibility of "safeguarding" measures, in the form of blanket tariffs and quotas, being introduced across the EU. This will involve the reviewing of all steel markets outside Eurpoe to discover whether more duties are required to prevent low-cost steel flooding the EU market. Any such measures are likely to result in significant price rises and a shortage of materials, squeezing the margins of EU distributors.
Unfortunately, stainless steel is likely to suffer the worst as a result of new duties. A spokesperson of the Engineering Export Promotion Council of India said, "while exporters of both crude steel and stainless steel will be impacted, the jolt for stainless steel is likely to be more.”
BS Stainless will continue to supply stainless steel products at the lowest possible market price. For updates on this situation, subscribe to our newsletter.