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Will Steel Be on the Agenda in the Upcoming G20 Meeting?

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Part 3
Will Steel Be on the Agenda in the Upcoming G20 Meeting? PART 3 OF 6

Could US Steel Fall Prey to Geopolitics?

U.S. Steel Corporation

According to North Korea, it recently launched an intercontinental ballistic missile. The move has come just ahead of the annual G20 meeting that’s scheduled for July 7–8, 2017, in Hamburg, Germany. The test was also launched just before Independence Day in the United States.

In this article, we’ll discuss whether the North Korea’s missile test could have any impact on the steel import probe in the United States.

Could US Steel Fall Prey to Geopolitics?

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North Korea

President Donald Trump hasn’t minced words about the menace of North Korea’s missile test program. However, North Korea has been going ahead with the program despite global sanctions. Now, the situation in the Korean Peninsula is tricky and seems to warrant a response.

The United States will need more countries on its side if it’s to propose harsher sanctions against North Korea. The United States will need China on its side to put further pressure on North Korea. China is the only major country with economic ties to the country.

Remember that before the US election, Trump talked about a 45% tax on Chinese imports. He also talked about naming China as a currency manipulator. As things stand, we still don’t have much idea about the proposed 45% tax on Chinese imports. As for currency manipulation, the president has backed away from naming China as a currency manipulator.

Geopolitics

Trump’s stance on China is a reflection of how geopolitics can impact economics. One of the reasons that Trump may have toned down his rhetoric against China is that the United States will need China to put pressure on North Korea.

The ongoing Section 232 probe into steel imports has already irked several steel associations, especially in China and Europe. Steel companies (STLD) such as U.S. Steel Corporation (X) and AK Steel (AKS) have been banking on the probe to revive their fortunes. However, the wait could be a bit longer due to North Korea’s recent missile tests.

In the next article, we’ll see what could this mean for US steel prices (NUE) (MT).

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