Despite delay, Trump likely to impose steel tariffs: Experts

Dhaka,  Sun,  24 September 2017
Published : 15 Aug 2017, 21:06:18

Despite delay, Trump likely to impose steel tariffs: Experts

Despite delay, Trump likely to impose steel tariffs: Experts
WASHINGTON, Aug 15 (Reuters): US President Donald Trump is still expected to impose steel import tariffs on national security grounds despite the delay of a probe into the matter and pursuit of multilateral talks to reduce excess capacity, industry players and trade experts say.

US steel stocks have fallen nearly 10 per cent since Trump delayed the release of the so-called "Section 232" review of the US steel industry last month, partly reflecting fears that his promises to protect the industry may not materialise.

But industry analysts say the falls might be overdone, and there is reason to think that import relief may still happen.

"Based on (Commerce Secretary Wilbur) Ross's recent statements and our discussions with trade lawyers engaged in section 232, we still expect measures that will have a positive impact on US steel prices," said Seth Rosenfeld, a steel industry analyst at Jefferies in London.

"The most likely outcome is tariff rate quotas where the level of tariff changes dependent on the volume of imports. This structure serves as something of an upside cap on steel pricing so they do not get out of control," Rosenfeld added.

Trump launched the probe into whether steel imports compromise US national security in April, boosting US steel stocks, but said in July a final decision might have to wait until other top-priority issues are addressed.

Ross said he would defer to Trump's lead and also cited multi-lateral talks to reduce excess capacity, fuelling concern in the steel industry that the "232" review, initially scheduled to conclude in late June, might be scrapped or substantially watered down.

A Trump administration official told Reuters, however, that the steel probe remains active and "is still under the final stages of review within the administration".

He declined to comment on the possible timing of its release. By law, Ross has until mid-January 2018 to conclude his review. Trump would then have 90 days to act.

"Our hope and expectation is that there would be action on (section 232) sooner, rather than going the full time," said Tom Gibson, president of the American Iron and Steel Institute.

In a sign that some market players still anticipate a US  tariff move, steel import permit applications fell 12 per cent in July from June, making up 28 per cent of the market, according to US Commerce Department data compiled by AISI.
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