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Kallanish Kallanish

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July, 4th 2020

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Kallanish Steel Weekly: What will be the effects of the relaxation of US steel tariffs? (May 21, 2019)

Last week the market was dominated by the news that US authorities have decided to relax the existing steel tariffs on some of its principal external steel suppliers - Turkey, Mexico and Canada.

This happened as US trade tensions with China worsened, confirming that some uncertainty remains in the global trade war.

After almost a year, the US announced last week that it would halve the tariffs affecting steel Turkish imports into the country. This takes them back to 25%, in line with the level of tariff imposed on other importers such as China and Europe. The move was quickly welcomed by market players in Turkey, convinced that this will support both Turkish production and exports going forward, especially within the longs sector.

Ugur Dalbeler, ceo of Turkey’s Colakoglu, said that it is positive news to be able to export to the American market again. This is especially so, specifically because the Turkish domestic market continues to suffer from a reduction in demand.

The news about Turkey arrived in tandem  with the final confirmation that the US would also cancel its 232 tariffs of 25% for Mexican and Canadian steel imports. This move was designed to move the USMCA agreement towards a conclusion. 

Canada and Mexico are among the top importers of steel in the US and the cancellation of the S232 measures will lead to a rise in imports into the US from its North American partners. This could limit somewhat the positive effect of the halving of measures on Turkey.

Overall it needs to be noted that the former NAFTA region continues to suffer from a shortage of certain steel products. This means that Turkish (and other) suppliers will benefit from the softening of the US protectionist measures on steel in any case. This will be so whether by direct sales to the US or by supplying the country’s other commercial parties.