Following the release of the US Department of Commerce’s recommendations following its Section 232 investigation, industry bodies across the globe have continued to express their concerns.
The Japan Iron and Steel Federation (JISF) said that the recommendations are very regrettable. Imports of steel from Japan are integral to the US economy and do not threaten the national security of the United States. The statement said that the Japanese steel industry will study the impact of this report’s recommendations very carefully and will continue to monitor these developments carefully.
The Mexican steel association Canacero pointed out that in the last ten years US steel exports to Mexico have increased by 58 percent in value, from $6.2 billion in 2008 to $9.8 billion in 2017. In 2017, the US trade surplus with Mexico in steel products reached $3.4 billion, which shows how important the Mexican market is for the US steel industry. Canacero emphasized that Mexico should not be included in the Section 232 resolution since it does not represent any risk for the national security of the US, as the Mexican steel industry is not subsidized by the government. The Mexican steel association also warned that, in the event of being included within the measures to be applied within the scope of Section 232, it will be obliged to respond immediately with the application of equivalent and reciprocal measures.
The Russian Ministry of Industry and Trade has warned that it may challenge any possible Section 232 measures at the World Trade Organization (WTO) dispute settlement body. According to Russian media reports, Russian steelmaker Severstal said that it will not suffer in the event of the introduction of import measures and will be able to direct supplies from this market to others as the US is not one of the priority markets for Severstal, with about two percent of the company's sales going to the US in 2017. On the other hand, Russian pipe maker TMK expects a positive effect for its US IPSCO division in the event of the introduction of import restrictions, since such measures will lead to an increase in US domestic pipe prices.
The Steel and Engineering Industries Federation of Southern Africa (SEIFSA) cited the Global Trade Analysis Project (GTAP) Model, produced by Indiana, US-based Purdue University, according to which a 53 percent tariff on all steel imports from the 12 countries in question in the US DOC report including South Africa is expected to reduce imports by 13.3 million metric tons from 2017 import levels from the targeted countries. The countries identified are projected to account for less than four percent of American steel imports in 2017.
“This is really a matter of enormous concern to SEIFSA, since the latest developments have the potential of further dampening production in the local steel industry, reducing steel exports to the US, squeezing margins and depriving the steel industry of much-needed foreign reserves,” said Dr Michael Ade, chief economist with SEIFSA, adding that widespread protectionism of steel products might lead to trade wars and further price spikes in the raw materials used in everything from automobile manufacturing to household appliances and construction.