Wed, March 28, 2018 9:18 am
Steel Tariff Exemptions: Last week, the U.S. trade representative indicated that the U.S. will grant the EU, Argentina, Australia, Brazil and South Korea temporary exemptions from the steel and aluminum tariffs recently enacted as they negotiate with the U.S. Previously, exemptions were granted to Canada and Mexico due to the ongoing talks to revise The North American Free Trade Agreement (NAFTA). In 2017, U.S. steel imports totaled 34.5 mm MT; the countries now exempted account for 55.1% of last year’s imports. The exemption of the EU in particular is significant because in aggregate its member countries in 2017 comprised the second largest source of U.S. steel imports at just over 5.0 mm MT, second only to Canada at 5.7 mm MT. Brazil and South Korea were also noteworthy exemptions as last year they provided 4.7 and 3.4 mm MT of imported steel, respectively. Given President Trump’s previous comment about retaining flexibility in imposing tariffs including the possibility of raising steel tariffs above 25% to compensate for the exemptions of others, if the current exemptions are maintained, the list of remaining major importers has shortened considerably. The other important dimension of the steel tariff exemption is on the flow of U.S. met coal exports, especially high-vol coals; last year, U.S. met exports totaled 50.4 mm MT with the EU, Brazil, Canada, South Korea and Argentina collectively accounting for 61.2%.