US reduces steel tariffs on Turkey to 25 percent

Friday, 17 May 2019 20:33:55 (GMT+3)   |   Istanbul
       

The White House has announced that the 50 percent duty on Turkish steel imports has been halved to 25 percent as of May 17. In a statement, the administration said that since the implementation of the higher tariff, steel imports from Turkey declined 48 percent in 2018, "with the result that the domestic industry’s capacity utilization has improved at this point to approximately the target level recommended" in the initial DOC report from January 2018. "This target level, if maintained for an appropriate period, will improve the financial viability of the domestic steel industry over the long term," the statement said.

In August 2018, the US imposed an additional 25 percent duty only on Turkish steel imports after announcing Section 232 steel tariffs of 25 percent in March of the same year.

On the other hand, the US has terminated the Generalized System of Preferences (GSP) program for Turkey based on its level of economic development.

Even the unofficial reports of an imminent reduction of the duty have given rise to brisker activity in the Turkish domestic market in the last two days. Accordingly, import scrap prices in Turkey have picked up and some rebar deals have been concluded in the domestic market. In the short term, Turkey is expected to start export sales, especially of rebar, while this new development will likely provide support for all steel prices in Turkey. On the other hand, amidst the recovery in sales, Turkish steel producers’ capacity utilization rates are expected to improve.

Sources tell SteelOrbis that despite the stated reasons for reducing the import tariff on Turkey, the underlying motive is likely due to current tensions between the US and Iran; the US reportedly needs continued access to Turkish airfields in the event of a conflict with Iran, and the Turkish government might have negotiated a trade remedy in order to provide such access.


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