China announced late last week that it would impose a new round of retaliatory tariffs on imports from the USA. The new taxes cover a variety of steel products but will likely only have a meaningful impact on a handful of players in steel, Kallanish notes.
The Chinese move was in response to US President Trump’s threat to increase tariffs on almost all remaining untaxed imports from China effective 1 September. Almost as soon as China announced its retaliation, Trump announced his own confirmed tariffs on another $550 million of Chinese goods. As the trade war escalates, steel has been more prominent in rhetoric than in the actual flow of trade.
China’s imports of steel from the USA totalled 34,322 tonnes in the first half of 2019, down -25.2% year-on-year. The latest tariffs include a number of steel products. 10% tariffs will be imposed on some high-value goods such as grain-oriented electrical steel under 600mm wide. The total volume of products imported under the HS codes with 10% tariffs in the first half was only 73t, however.
5% tariffs will also be imposed on a larger volume of products, including line pipe and couplings, some sections and wire rod, and some hot rolled coil. In the first half of 2019 China imported 3,152t of these goods from the USA, or 9.18% of total steel imports from the USA.
Duties are also being imposed on a number of mineral imports from the USA and on fabricated and manufactured products containing steel. Overall, however, the impact of the tariffs is more political than practical. China had to find some way to respond in kind to the latest escalation in the trade war.