Economy
Notes from China: Tariffs are Having an Impact
Written by John Packard
July 2, 2019
It has been some time since we shared comments from one of our trading friends located in China. There have been significant changes in the Chinese steel industry, and the U.S. tariffs on China are having an impact, according to our source. Here is what he had to say:
“The Chinese market has not flexed its muscles in a long time, and there is more and more overseas investment by the Chinese to try and dodge global tariffs on Chinese-produced steel and downstream products. If you follow the Asian news, it is more evident of Taiwanese, Korean, Japanese investments in China that are withdrawing on a large scale and relocating to Vietnam, Cambodia and their own home country. The largest Taiwanese factories in China have closed up shop, or are in the process of doing so, and are moving investment back to Taiwan as the Taiwanese government is providing huge incentives for relocation back to the island.
“I just left Vietnam where you would be amazed to see all of the new erection of factories there, and the shortage of steel in Vietnam because of the new building projects, plus the inner governmental projects, too. It reminds me of China in the early 2000s lacking the number of new steel mills popping up..The Vietnamese government is keen on capacity and market control, not widespread export and price pressure as the Chinese had during their transition.
“It is my opinion that China will slowly fade away from being the point of focus in steel news and market trending. In fact, it is already deteriorating. More people are keen in wanting to know where the Chinese offshore steel investments are, and they can be found in Eastern Europe, the Middle East and Africa. Steel mill JVs and mining projects. A LOT…”
John Packard
Read more from John PackardLatest in Economy
Steel groups welcome passage of budget bill
Steel trade groups praised the passage of the Big Beautiful Bill (BBB) in Congress on Thursday.
Industry groups praise Senate for passing tax and budget bill
The Steel Manufacturers Association and the American Iron and Steel Institute applauded the tax provisions included in the Senate's tax and budget reconciliation bill.
Chicago PMI dips 0.1 points in June
The Chicago Purchasing Managers Index (PMI) slipped 0.1 points to 40.4 points, in June.
Multi-family pullback drives housing starts to 5-year low in May
US housing starts tumbled in May to a five-year low, according to figures recently released by the US Census Bureau.
Architecture firms still struggling, ABI data shows
Architecture firms reported a modest improvement in billings through May, yet business conditions remained soft, according to the latest Architecture Billings Index (ABI) release from the American Institute of Architects (AIA) and Deltek.