Turkish producers cautious on Section 232 tariff cut news

The US government is preparing a “free trade agreement” package, which may also contain revised Section 232 duties on Turkish steel, in order to help increase trade with Turkey, as reported by several Turkey-based media outlets, but Turkish steel executives are awaiting more details.

A top Turkish steel industry source on Wednesday told S&P Global Platts that he wants a clearer picture before commenting officially, but the developments “are very hopeful.”

US Ambassador to Turkey David Satterfield made a briefing to the Turkish presidency about the free trade package last Friday, according to a BloombergHT report. The package could contain Turkey’s potential purchase of US Patriot air missiles, new proposals about Turkey’s participation in the F-35 Joint Strike Fighter program, as well as a cut of import duties against Turkish steel.

Speaking at a meeting with US Secretary of Commerce Wilbur Ross on September 10 in Turkey, Turkish president Erdogan said he and his US counterpart agreed to kick-start free trade agreement talks, and that officials from both nations would soon begin preparations, as Platts has reported.

“I also attended the (Sep 10) meetings with Wilbur Ross by the Trade Ministry’s invitation,” a Turkish steel mill executive told Platts Wednesday, noting that he was currently in New York along with the Turkish president and several of the country’s ministers, including Trade, for the UN General Assembly. “All of the subjects will be discussed including steel, but it is too early to make a comment,” he said.

“We shouldn’t forget that Wilbur Ross [was] also a steelmaker and he is not very eager to accept tax-free steel imports from Turkey, but as $50 billion of reciprocal trade is in question, it may take some time to reach an agreement,” the executive said, adding that some scrap suppliers were already trying to benefit from the news in the hopes of raising their offer prices.

The US government’s decision in mid-May to reduce the Section 232 tariff on Turkish steel back to 25% from 50% has so far failed to meet Turkish producers’ expectations of increased exports, as Turkish mill sources say their steel offer prices remained uncompetitive in the US market.

— Cenk Can