Trump will impose 25% tariffs on Steel and Aluminum

The US president said he planned sweeping tariffs on all steel and aluminum imports on Monday and would take other action to even out tariff rates with the rest of the world later this week.

Donald Trump has said he will announce new 25% tariffs on all steel and aluminum imports into the US on Monday that would affect “everybody’, including its largest trading partners Canada and Mexico, in another major escalation of his trade policy overhaul.

Trump’s pre-announcement came as China’s retaliatory tariffs, announced last week, came into effect. The measures target $14bn worth of products with a 15% tariff on coal and LNG, and 10% on crude oil, farm equipment and some vehicles.

The US president, speaking to reporters on Air Force One on Sunday, also said he would announce reciprocal tariffs – raising US tariff rates to match those of trading partners – on Tuesday or Wednesday, which would take effect “almost immediately”. “And very simply, it’s, if they charge us, we charge them,” Trump said of the reciprocal tariff plan.

The move on steel and aluminum brought a swift reaction from Doug Ford, the premier of the Canadian province of Ontario, who accused the US president of “shifting goalposts and constant chaos” that would put the economy at risk.

Monday’s tariffs would come on top of existing metals duties.

Amid wider pushback against Trump’s economic heavy-handedness, French President Emmanuel Macron warned in an interview broadcast on Sunday that he was willing to go “head-to-head” on tariffs with the US president. “I already did so, and I will did (sic) it again.”

Macron told CNN that the EU should not be a “top priority” for the US, saying: “Is the European Union your first problem? No, I don’t think so. Your first problem is China, so you should focus on the first problem.”

Macron said tariffs would harm European economies but also the US, given the level of economic ties. “It means if you put tariffs on a lot of sectors, it will increase the costs and create inflation in the US. Is it what your people want? I’m not so sure,” he said.

He said the EU must be ready to react to US actions, but stressed that the 27-nation bloc should mainly “act for ourselves”. “This is why, for me, the top priority of Europe is competitiveness agenda, is defence and security agenda, is AI ambition, and let’s go fast for ourselves.

“If in the meanwhile, we have [a] tariff issue, we will discuss them and we will fix it.”

Trump has long complained about the EU’s 10% tariffs on auto imports being much higher than the US car rate of 2.5%. He frequently states that Europe “won’t take our cars” but ships millions west across the Atlantic every year.

theguardian.com

US extends rebar AD order on 7 nations, including Poland and Latvia

The US International Trade Commission (ITC) has ruled that antidumping duties on imports of rebar from seven nations should not be removed, Kallanish discovers in a federal document.

“Revocation of the antidumping duty orders on rebar from Belarus, China, Indonesia, Latvia, Moldova, Poland and Ukraine would be likely to lead to continuation or recurrence of material injury to an industry in the United States within a reasonably foreseeable time,” the ITC writes in a notice circulated Thursday.

The latest determination is a result of a fourth round of five-year sunset reviews.

After the prior review in 2018, the Department of Commerce issued average dumping margins of 114.53% for Belarus, 133% for China, 71.01% for Indonesia, 16.99% for Latvia, 232.86% for Moldova, 52.07% for Poland and 41.69% for Ukraine. Commerce’s case originated in 2001.

The AD order includes all steel concrete reinforcing bars sold in straight lengths. Excluded are plain round bars and processed rebar that has been bent or coated.

Dom Yanchunas USA

kallanish.com

EU HRC prices fall slightly amid uncertainty over US presidential election results

Domestic European hot-rolled coil prices fell slightly Nov. 6, as the announcement of Donald Trump’s victory in the US presidential election created uncertainty for market participants, over the prospect of higher protectionism in the US market under a Trump administration.

Market activity remained subdued as demand was unchanged.

“The market is half dead,” a Germany-based trader source said. “Announced price increases from mills are not working, as there is no demand.”

The source described price increases by European mills as “wishful thinking,” while calling the situation “a fight for the lowest price.”

The source said there was no damage to mill orderbooks because of the election’s result, as most orderbooks were full until the end of the year.

According to the same source, there was “no real strengthening of the market,” due to poor construction and automotive demand domestically.

Platts assessed Northwest European HRC at Eur555/mt ex-works Ruhr Nov. 6, stable on the day.

Offers were reported at Eur560-640/mt ex-works Ruhr.

Platts assessed domestic HRC in Southern Europe at Eur550/mt ex-works Italy, down Eur5 on the day.

Platts assessed imported HRC in Northwest Europe at Eur520/mt CIF Antwerp, down Eur10 on the day.

Platts assessed imported HRC in Southern Europe at Eur525/mt CIF Italy, down Eur10 on the day.

Anais Dolan

US steel associations applaud introduction of ‘Prove It’ Act

Two US domestic steel associations are supporting this week’s congressional introduction of the so-called “Prove It” Act, which would verify the carbon intensity of steel from various sources, Kallanish learns from association statements. 

The American Iron and Steel Institute (AISI) and the Steel Manufacturers Association (SMA) applaud the formal introduction of the “Providing Reliable, Objective, Verifiable Emissions Intensity and Transparency Act” to the US House of Representatives on 9 July.

The Prove It Act authorises a comprehensive study by the Department of Energy to compare the greenhouse gas (GHG) emission intensities of certain goods, including steel, produced in the US to those produced internationally. The study is expected to provide detailed, specific and transparent data on emissions to assess the environmental standards of foreignly produced products.

AISI president and chairman Kevin Dempsey explains that passing the Prove It Act protects US domestic steel producers and their investments in emissions-reduction efforts.

“The Prove It Act would do as its name implies by creating an official source to verify the superior carbon efficiency of vital American industries, like steel, and give policymakers the data needed to make the case for action,” states Dempsey.

Dempsey notes that US steel producers are at a disadvantage when inexpensive foreign products with fewer GHG restrictions are permitted to be sold in the US.

“Trade-distorting policies in many countries continue to contribute to massive global overcapacity in steel, much of which is from countries that are producing steel that is much more carbon emissions-intensive than American steel, including China, India, Indonesia and other Southeast Asian nations,” Dempsey mentions.

SMA president Philip Bell applauds the effort by both major political parties to bring the legislation to the US House.

“SMA supports the bipartisan Prove It Act because we know that it will demonstrate conclusively that American steel has the lowest carbon emissions in the world. A US Department of Energy study determining the emissions intensity of domestically produced goods will show the world that American steelmakers have a significant carbon advantage over their counterparts in Europe, Asia, the Middle East and everywhere steel is made. We look forward to working with Congress to make sure we get the best bill possible,” states Bell.

Republican Representative John Curtis of Utah and Democratic Representative Scott Peters of California introduced the Prove It Act to the US House of Representatives. Earlier this year, Republican Senator Kevin Cramer of North Dakota and Democratic Senator Chris Coons of Deleware introduced the bill in the US Senate Environment and Public Works Committee (see Kallanish 16 May).

Kristen DiLandro USA

kallanish.com

USS ceo ‘extremely confident’ Nippon deal will close

US Steel’s (USS) top executive still expects that the takeover of the iconic Pittsburgh, Pennsylvania-based company by Japan’s Nippon Steel will receive all approvals by the end of 2024, Kallanish hears at the Global Steel Dynamics Forum in New York.

Speaking on the conference stage late Tuesday, USS president and chief executive officer David Burritt reiterates that a merger with Nippon is “the right choice” for his 123-year-old company and for US national security and economic well-being.

“I’m extremely confident that we will be able to close the deal this year,” Burritt proclaims.

The acquisition agreement, announced last year, has faced opposition not only from the United Steelworkers but also from both major US presidential candidates and members of Congress in Pennsylvania and other states. The arrangement is undergoing an in-depth review by the US Department of Justice (DoJ).

Burritt says his employees will come to understand that they will benefit from the takeover. He says Nippon pledges to honor current labour contracts through 2026 and will invest over $1 billion in the business, a capex commitment that exceeds existing thresholds in pacts with the union.

“They’re experts in integrated mills, and they want to invest here,” Burritt explains. “They’re upping the ante beyond what’s in the basic labor agreement.”

He argues that the “friendshoring” arrangement with a buyer based in Japan, a key US ally in the Asia-Pacific region, “strengthens national security.” Additionally, Burritt finds it a breath of fresh air that there will be technology transfer into the US instead of the usual route out of the US.

The USS ceo says there was so much interest in acquiring his company that “something like 19 NDAs” were signed, referring to non-disclosure agreements that precede negotiations. Some proposals would have bumped into antitrust roadblocks, but not with Nippon.

“Customers love it so much that they have written letters to the DoJ saying this deal will strengthen competition,” Burritt states.

Dom Yanchunas USA

kallanish.com

Biden administration confirms China 25% steel tariff

The Biden administration confirms it will increase the tariff rate on certain China-origin steel and aluminium products under Section 301 from 0-7.5% to 25% in 2024. This follows an in-depth review by the United States Trade Representative.

The move is part of tariff action against multiple Chinese products, designed to encourage China to “eliminate its unfair trade practices regarding technology transfer, intellectual property, and innovation”, a White House statement says.

Besides steel and aluminium, the tariff rate on Chinese semiconductors will increase to 50% by 2025, on electric vehicles under Section 301 to 100% in 2024, on lithium-ion EV batteries to 25% in 2024, and on solar cells (whether or not assembled into modules) to 50% from 2024. Ship-to-shore cranes and medical products are also impacted.

“China’s forced technology transfers and intellectual property theft have contributed to its control of 70, 80, and even 90% of global production for the critical inputs necessary for our technologies, infrastructure, energy, and health care – creating unacceptable risks to America’s supply chains and economic security,” notes the White House statement seen by Kallanish.

“Furthermore, these same non-market policies and practices contribute to China’s growing overcapacity and export surges that threaten to significantly harm American workers, businesses, and communities,” it adds.

“We will continue to work with our partners around the world to strengthen cooperation to address shared concerns about China’s unfair practices – rather than undermining our alliances or applying indiscriminate 10% tariffs that raise prices on all imports from all countries, regardless whether they are engaged in unfair trade,” the note concludes.

Some of the impetus to review trade agreements with China came from Chinese customs data that showed a 30.7% year-on-year increase in steel exports during the first quarter.

The review has received support from US steel industry leaders. Last month, American Iron and Steel Institute president Kevin Dempsey said that while direct Chinese steel shipments have not grown to the US to this extent, Chinese steel exports to third country markets are often further processed into downstream manufactured products that are supplied to the US.

kallanish.com

Biden administration unveils its final Buy America guidance

US President Joe Biden’s administration has published its final “Build America Buy America” guidance in order to help federal and state agencies fully take advantage of funding being granted through the Bipartisan Infrastructure Law.

Kallanish understands that the Office of Management and Budget (OMB) has issued a revision to Title II of the code of federal regulations (2 CFR). This revision includes the addition of a new amendment to the code, section 184, intending to define key terms that pertain to iron/steel products.

In 2 CFR section 184, OMB explains that materials incorporated in infrastructure projects must meet the Buy America preferences for only a single category in which the materials are classified. This means that, in the case of iron and steel products, there is no restriction on the place of manufacturing for components or subcomponents that do not consist of iron or steel.

“The final guidance will support implementation of the Bipartisan Infrastructure Law’s (BIL) statutory requirements that manufactured products, construction materials, and iron and steel used in federally funded infrastructure projects are made in America,” explains Livia Shmavonian, the Biden administration’s Made in America director.

Zach Johnson USA