According to Wood Mackenzie, a global energy, chemicals, renewables, metals and mining, research and consultancy group, Donald Trump’s decision to abandon the Trans-Pacific Partnership will not have much of an immediate impact on the US steel industry, although long-term negative effects are expected to be significant.
In 2015, around 30 percent, or 11 million tons, of all steel imported into the US came from the countries in the agreement—Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, and Vietnam—at a value of approximately $11 billion. At the same time, 89 percent or around 9 million tons of all steel exported from the US was destined to these countries, at a value of approximately $12 billion.
“This shows that the US steel industry made more money by selling steel to these trading partners than it lost by importing from them,” Wood Mackenzie said in a news release Wednesday.
What’s more critical, according to the analyst firm, is that the kind of steel the US exported to the TPP countries was high in value-added, which is the kind of product that helps to keep the high-cost US steelmaking business afloat.
“Ultimately, NAFTA plays a more important role for the sector,” Wood Mackenzie said, adding that it’s important to keep in mind that US steel and manufacturing industries are heavily reliant on imports. “Weaning itself off ‘imported steel’ will put pressure on manufacturers’ costs and ultimately the US consumer will suffer.”