Changes in Legislation re Import Tariffs Affect Steel Industry

Rolls of sheet steel in warehouse/factory. Please see related pictures:

Recent changes I legislation with respect to import tariffs have greatly affected the steel industry. U.S. President Trump in April 2017 ordered an investigation into the national security implications of foreign imports of US steel. Days later, he signed a memorandum for a similar investigation on aluminum. Both were efforts undertaken by the Commerce Department under Section 232 of the law, which has only been used twice, most recently in 1981.

The Trump administration is now imposing tariffs on steel and aluminum importer from the European Union (EU), Canada and Mexico and Brazil to help protect America’s manufacturing base. The decision, announced by Commerce Secretary Wilbur Ross, came hours before temporary exemptions were to due to elapse on Friday, June 1.

Since these changes have gone in effect, Canada has threatened to retaliate with its own tariffs on US goods to the tune of approximately 12.8 billion dollars. The EU has taken this up with the World Trade Organization and the G7 meetings held in Canada were dominated by talks of tariff actions and repercussions.  For anyone in trade and commerce, these are turbulent times.

Con-Tech Vice President of Steel, Howard Powell states: This is so crazy, chaotic and unprecedented that we just cannot predict as to what may happen.

Fortunately, Powell has been in the steel industry for 40 years and has weathered many challenging times. His expertise and connections in the industry have allowed Con-Tech to strategically purchase goods in anticipation of these events. Powell also states: the tightening of the supply side should make the domestic price rise even more and that should assist us later on this year.

Some U.S. companies are feeling the effects of the steel tariffs immediately, with layoffs and cancelled orders beginning. Other manufacturers say domestic steel producers are not ready for the increase in volume required to keep up with demand. Both of these situations could result in higher prices for end users of steel and aluminum made products.