The United States has imposed more than 190 steel tariffs over the last few decades, but none have captured the public attention as much as the 25 percent across-the-board tariffs on steel the Trump administration has imposed.
Free marketers have cried protectionism. Trump critics have cited fears of a trade war. China just announced a round of retaliatory tariffs, on everything from nuts and frozen pork to ginseng and wine.
Most business interests decried the higher costs that come with the steel and aluminum duties, except of course the metals sector. The steel industry hailed the Section 232 tariffs, promising to bring back steelworker jobs and even hand out bonuses in the case of a Chicago-based service center.
But PNC Financial Services Group Regional Economist Kurt Rankin questions whether the steel tariffs ultimately will have any actual impact with all the exemptions being made, and if will end up being more of a toothless PR stunt.
“This mirrored the timing of the March 8 proclamation of tariffs on imports of steel and aluminum, which was released after the 24-hour news cycle ran the first headlines describing the tariffs,” Rankin said. “Contrary to those headlines, the text of the March 8 proclamation left ample room for the Trump administration to exempt large portions of U.S. metal imports from the tariffs, and they did: the tariffs will not apply to aluminum or steel imports from Canada, Brazil, the EU, Mexico, South Korea, Australia, or Argentina, which collectively are the source of most imported steel and aluminum.”
And more exceptions are likely to come at a time when the American Iron and Steel Institute estimates imports are near an all-time high, Rankin said.
“The Commerce Department will probably exempt other metal imports through a process that allows businesses utilizing imported metal products to apply for an exclusion to the tariffs for products that are unavailable from domestic sources in sufficient quantity or quality, or for national security considerations,” Rankin said. “These exemptions defang the metal tariffs. Domestic metal prices are unlikely to see meaningful support from them, and domestic producers will continue to face challenging foreign competition.”
Steel imports captured about 26 percent of the market share last year when U.S. steel production totaled 82 million tons last year, down from 98 million tons in 2012, according to economic data website Statistica.