China Industrial Building Engineering Steel

How much influence does the US impose a 25% tariff on Chinese steel exports?

14 shares, 866 points

2018-3-9, US President Trump signed an order, and after 15 days, the United States imports steel and aluminum respectively with 25% and 10% tariff. The tax is for all countries that export steel and aluminum to the United States, but Canada and Mexico receive a 30-day tariff exemption. The subsequent extension will depend on the progress of the North American Free Trade Agreement under negotiation.

An official from the Trump administration said that tariff exemptions in the countries concerned would lead to an increase in tariffs in other countries to maintain 80% capacity utilization targets for domestic (steel and aluminum) producers.

Directly, this policy has limited impact on China’s steel industry and aluminum industry, especially on the steel industry. COSASTEEL is a Chinese steel coil manufacturer and is being affected by tariffs.

The United States is the world’s largest importer of steel. According to data from the American Iron and Steel Association, in 2017, the United States imported 38.12 million tons of steel products, a year-on-year increase of 15.4%. Among them, 29.558 million tons of finished steel products, an increase of 12.2%. In the ranking of finished steel imports, China ranked seventh, with imports of 813,000 tons, down 5.7% from 2016 and accounting for 2.75% of total US finished steel imports.

China’s steel output accounts for about half of the world’s total output, and its export volume ranks first in the world. Since 2011, China’s steel exports have maintained double-digit growth year after year, and by 2015 the export volume reached a peak of 112 million tons. After 2015, affected by international trade protectionism and domestic supply-side reforms, steel exports entered a downward channel. In 2016, exports reached 108 million tons, down 3.5% year-on-year. In 2017, exports were 75.41 million tons, down 30% year-on-year. Ppgifacrory steel company exports fell by 15%.

Although the total export volume has been rising, China’s exports of steel to the United States have been declining year by year. According to the monitoring data of the Lange Steel Research Center, a third-party market research institute, in 2006, China exported 5.4 million tons of US steel products, accounting for 12.56% of China’s total steel exports. By 2017, China exported 1.18 million tons of US steel products. It accounts for 1.56% of China’s total steel exports. In the ranking of China’s steel exporting countries, the United States dropped from the second place in 2006 to the 18th place in 2017.

The United States is the country that has initiated anti-dumping and countervailing duties on Chinese steel products. According to the US Department of Commerce, as of the end of 2018, there were 169 anti-dumping duties and countervailing duties against steel products in the United States, 29 of which were for China. At the same time, the United States initiated a number of safeguards or special protection investigations on Chinese steel products. Formal tariffs restrict the export of Chinese steel products to the United States.

From the overall export scale of China’s steel products, the scale of China’s steel production capacity involved in the US tariff protection is not large, but China’s steel exports to the United States may further shrink.

China’s aluminum exports account for about 10% of annual production. In 2017, exports to the US accounted for about 14% of China’s total aluminum exports. Due to the sharp rise in international aluminum prices, China’s aluminum products, which have been suppressed by double anti-tariffs, have become more competitive in the United States. In January-February this year, China’s unwrought aluminum and aluminum exports to the United States totaled 817,000 tons, a year-on-year increase of 26%.

The Trump administration imposes far lower tariffs on aluminum than steel. On February 27 this year, the US Department of Commerce made a final ruling on the anti-dumping and countervailing investigations of China’s important aluminum export-oriented aluminum foil products. The Chinese aluminum companies involved in the case faced a maximum of 186% “double-reverse” tax rate. In contrast, the 10% new tariff is not a priority for Chinalco.


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