Although Donald Trump’s proposed 25 percent tariff on steel imports won’t be official until next week, traders are already telling their customers to “say goodbye” to import offers that will soon be priced out of the market. New offers have been on hold since the US DOC publicly released its recommendations in the Section 232 investigation, and according to one source, Trump’s surprise announcement this week has “at least ended the uncertainty—now we know how bad it’s going to be.”
The last heard offers for imported wire rod in the US domestic market from Germany were around $31.50 cwt. ($630/nt or $694/mt) DDP loaded truck in US Gulf ports; adding a 25 percent tariff would bring offers up to around $39.00 cwt. ($780/nt or $860/mt), which is far higher than current US domestic spot prices. Even if traders were able to negotiate import offers closer to US prices, there would be little incentive to order offshore due to longer lead times and higher tonnage minimums compared to US domestic wire rod orders.
Still, some in the market are hopeful that the strong backlash to the tariff announcement—coming from a wide variety of end-use sectors, US allies, and even Republican politicians—will result in a “softening” of the original proposal, with either a lower tariff rate or a more targeted approach to specific countries and/or steel products.
Then again, Trump appeared to double-down on his support for the tariffs, tweeting Friday that “trade wars are good, and easy to win.”