Trade Cases
Letter to the Editor: Trader Sees Damage to Mills from Section 232
Written by Tim Triplett
September 4, 2019
Steel Market Update received the following letter from a trading company executive and we thought it should be shared with our readers:
I was just reading your article concerning Section 232 and came up with the following short conclusions:
The damage of Section 232 to the integrated mills is done. The windfall profit reaped by the mills in 2018 has been reinvested by Nucor, SDI, Big River and North Star Bluescope in new modern capacity, thereby expediting the demise of old inefficient facilities. The restart of already shuttered older mills only added to the problem.
If the purpose of Section 232 was truly for national security reasons to keep a financially healthy steel industry, then the jury is still out on the success of the program. Yes, more modern production will come on stream in the U.S. (and North America), and that is a good thing. Nevertheless, steel mills die hard, and Nucor, SDI, et al, will have to be patient to reap the benefits of their quick action as they will have to endure the steel downturn that is more than likely coming as inefficient excess capacity will need to be taken out of the market (again). As for the integrated mills, Section 232 did not do them any favors that I can see.
I really doubt that import levels will change much going forward, regardless of what happens with Section 232, or even the dumping suits that will likely follow.
Trading Company Executive
(name withheld on request)
You are welcome to comment. To do so send your comments to info@SteelMarketUpdate.com
Tim Triplett
Read more from Tim TriplettLatest in Trade Cases
Leibowitz: Trump takes aim at trade with a tariff ‘punt gun’
The tariffs are intended to produce more investment and jobs in US manufacturing. But first, there will be a cosmic change, potentially wiping out millions of jobs in the short run. While administration officials will no doubt cringe at the comparison, it reminds me of the effort to undercut fossil fuels production to address climate change. Led by Democrats, the effort was to destroy fossil fuels so that renewable energy sources would have more space to grow. The result: inflation and electoral defeat in 2024.
Price: Expect new trade shocks as Trump’s ‘reciprocal’ tariff negotiations continue
President Trump cast a wide net with the proposed, reciprocal tariffs. The negotiating stage will be critical to determining the success of his strategy. And for those suffering tariff whiplash, don’t expect the pace of change to slow down just because the reciprocal tariffs are entering a negotiating phase.
SMU Survey: Less support seen for Trump tariff policies
Meanwhile, an increasing number think it's too early to say whether the penalties are going to bring more manufacturing to the US.
CRU: USW seeks exclusion for Canada from Trump’s tariffs
The union is also urging stronger enforcement against countries such as China which break trade rules, and a coordinated Canada-US strategy to protect union jobs across the North America
Price on trade: A lot happened last week – and it wasn’t all about tariffs
Should foreign investment be allowed to reshape the American steel Industry? Not to be lost in the recent on-again-off-again tariff frenzy, Nippon Steel’s proposed takeover of U.S. Steel has also found itself in President Trump’s crosshairs when it comes to trade and industrial policy. Nippon Steel initially announced its nearly $15-billion bid for U.S. Steel […]