08-08-2018

US Steel Imports Drop For First Time In Year Under Weight Of Tariffs

For the first time in a year, the value of iron and steel imported into the United States has declined, according to U.S. Census Bureau data released Friday. At the same time, a broad swath of articles made from iron and steel products grew at the slowest pace in a year.

What the data also showed was steady growth in many of these imports in the months leading up to the tariffs imposed by the Trump Administration.

The first category would include sheets of steel, for example, while the second would include everything from washing machines and metal household goods to nails and screws.

Trump, one in a long string of U.S. presidents who have tried to buttress the long-beleaguered U.S. steel industry against foreign competitors, initially was targeting China, which it accused of dumping steel at below market prices on the global market. But it can be difficult, in this age of globalization, cross-border transactions and complex supply chains, to target one country, as is apparent in the data.

When it became clear that the United States actually imported little steel to be used in manufacturing directly from China — two of the president’s top three trade advisors, Commerce Secretary Wilbur Ross and U.S.T.R. Robert Lighthizer, are well acquainted with the steel industry from their pre-Administration, private-sector lives, and the third, trade advisor Peter Navarro, is well-known for his animus toward China– that battle shifted to U.S. allies and devolved into rancorous disputes with Germany, Canada, Brazil, Mexico, Japan and others.

For June — the data released Friday — imports in first broad category fell 10.19% when compared to the same month the previous year. That’s a significant reversal. Over the course of the previous 11 months, the increases in raw iron and steel topped 10% on all but one occasion, including three months above 20%. That’s also divergent from overall U.S. imports. While overall U.S. imports have increased every month over the same month in the previous year, they only topped 10% growth two times when compared to the same month in the previous year.

In the second category, the one including washing machines, stoves, tubes and pipes, nails and screws, the data is quite similar. Ten of the last 12 months, the gain, when compared to the same month in the previous year, was greater than 10%, with four of those months above 20%.

Then, in May, the percentage gain slipped below 10 percent for the first time, to 9.4%, and in June to the lowest level in a year, to 3.65%.

Which countries are being affected?

On the first category, which includes sheets of steel and other forms generally then used in the manufacturing process, whether to make washing machines or automobiles or other goods, China has not accounted for more than 3% of U.S. imports for at least two years. Canada has been the leader in these imports during that time, accounting for more than 20% of the total for four of the last five months. That was until June, when the total slipped to 17.84%, the lowest total since July of 2017, and imports from Russia jumped from 7.06% in May to 13.48%. For Russia, that was its highest percentage since July 2017.

Imports from Brazil and Turkey each fell more than $100 million in June, when compared to the same period of 2017, while those from South Korea fell more than $80 million. Imports from China fell 2.31 million. Imports from Russia increased more than $145 million.

In the second category, which includes the more finished products like ranges and ones that, like screws and nails, can go into a finished product, China has long dominated and still does. Over the last 24 months, it has accounted for more than 30% of all imports 18 times, with the June total of 34.48% the highest percentage since February and the fifth highest percentage in that two-year period.

For the month of June, imports from China increased 12.40%, or about three times as fast as all imports in this category. No other country came close to those gains. The gain in Chinese imports was equal to a gain of $124.34 million, about five times the gain registered by the country with the second largest gain.

Source: Forbes

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