SMU Data and Models

Will the New NAFTA Be Good for Your Business?

Written by Tim Triplett

Steel buyers and sellers appear evenly split on whether the renegotiation of NAFTA will benefit their companies. Responses to Steel Market Update’s market trends questionnaire, emailed to several hundred steel executives earlier this week, suggests that most companies don’t really know if the new NAFTA being pursued by the Trump administration will be good for their businesses.

More of their comments were negative than positive, however:

· “Some of my final customers supply to Mexican manufacturing, which comes back to the U.S. They are very concerned about NAFTA as they feel any change will be negative for their business.” Trading Company

· “If it means higher steel prices, that will be bad for our business because we are competing against similar products made of other materials.” Manufacturer/OEM

· “Unintended consequences will occur if NAFTA is changed.” Manufacturer/OEM

On a more positive note, one service center executive said, Ross Perot nailed it! And in a decade Mexico built a middle class. Unfortunately, it was a big chunk of ours.” Said another service center, “It should hopefully lead to more manufacturing in the U.S.” Agreed a manufacturer, “but only if Canadian steel products are taxed coming into the U.S.”

Several expressed doubts about the ability of the Trump administration and its trade negotiators:

· “I see it as a non-event, given the current government’s ineffectiveness in moving any initiatives.” Service Center/Wholesaler

· “NAFTA seems to neither hurt nor help us, and I lack confidence in the current administration.” Manufacturer/OEM

· “Nothing the U.S. government has done is good for our business. We all drank the Kool-Aid and we all look stupid.” Service Center/Wholesaler

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