US steel imports
Section 232 tariffs came into effect last month after President Trump finalized a 25% tariff on steel and a 10% tariff on aluminum imports. The tariffs are expected to dent steel imports, boosting domestic steel manufacturing. Meanwhile, US steel imports have fallen even before the Section 232 tariffs.
February 2018 imports
The United States imported 2.1 million metric tons of steel products in February 2018. In comparison, the figure stood at 2.6 million metric tons in January 2018 and 2.5 million metric tons in February 2017. Plus, in absolute terms, February 2018 imports are at the lowest level since February 2016. That month, US steel imports fell to a four-year low. The decline in US steel imports is a welcome sign for US steelmakers, including U.S. Steel Corporation (X), AK Steel (AKS), and Nucor (NUE). Lower steel imports are expected to boost US steel manufacturing and support domestic iron ore demand, which could benefit Cleveland-Cliffs (CLF). Lower steel imports also support domestic steel prices. ArcelorMittal (MT), which gets almost a quarter of its revenues from NAFTA (the North American Free Trade Agreement) also benefits from higher US steel prices.
Section 232 tariffs
The Section 232 tariffs are a watered-down version of President Trump’s previous stance. He had indicated that no countries would be granted exemptions. Now, while exemptions have been granted for several countries, President Trump could still impose a quota on steel imports from the exempted countries, like we saw with South Korea.
In the next part of this series, we’ll look at the detailed breakup of February steel imports data.