Cover story№ 2 November 2018

The summer of 2018 brought a new wave of international trade conflicts. In June, the US extended its 25% tariffs on steel imports to products from the EU, Canada and Mexico. From July 19 the European Union imposed its own restrictions on steel imports, applicable to all exporters except those based in countries that are part of the European economic zone. At the same time, US trade relations with China are tenser than ever before.

Metalloinvest experts point out that the biggest uncertainties are not directly caused by the US tariffs, but by the chain reaction of special measures and debates, which they have prompted in a growing circle of countries and industries. Meanwhile, the use of concepts such as “national security” to justify protectionism opens a Pandora’s box in international trade. The US has imposed steel tariffs and the EU has introduced quotas and duties to protect itself from the effect of the US action.

What other countries will do after reaching the export ceiling imposed by the EU quotas is hard to predict. Further consequences of the new steel tariffs are also unclear. Steel is one of the most conflict-prone sectors of international trade, and upsets in that segment spread quickly to other markets and industries, which will be forced to adjust their demand for steel. How far the ripples will spread remains to be seen.

Steelmakers are thinking hard about how they can maintain profitability of steel exports, taking into account the anti-dumping duties and levels of access of foreign competitors to their own domestic markets. The winners in the new environment will be companies that can improve the quality of their products and customise their steel supplies to meet the needs of specific customers.

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