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Trump’s Tariffs: More Countries Investigate China

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Dec. 4 2020, Updated 10:53 a.m. ET

President Trump’s tariffs

President Trump has imposed tariffs on billions of dollars of Chinese goods. More tariffs have been proposed. Along with these China-specific tariffs, there are also the Section 232 tariffs on US steel and aluminum imports, which cover several other countries.

Regarding the Section 232 tariffs, while US steel and iron ore producers like U.S. Steel Corporation (X), AK Steel (AKS), and Cleveland-Cliffs (CLF) have been vocal about their support, the response from the US aluminum industry has been mixed. Alcoa (AA), which has smelters in Canada, requested that President Trump acts against the core issue of Chinese aluminum overcapacity. Chinese aluminum exports have been on an uptrend in 2018, as you can see in the above graph.

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Section 232 tariffs

Fearing an import deflection following the Section 232 tariffs in the United States (SPY), several regions including the European Union and Canada are contemplating tariffs on Chinese steel products. Notably, Canada launched an anti-dumping investigation into cold-rolled steel imports from China, Vietnam, and South Korea a week after the Department of Commerce slapped duties on products from Vietnam. The steel originated in China. Mexico has also opened a probe into aluminum foil imports from China. The timing is intriguing—shortly after the US and Mexico reached a trade deal.

Protectionism

Voices of protectionism have been echoing in several countries. China is usually at the receiving end. The country’s allegedly subsidized exports have been blamed for decimating domestic industries in several countries. Previously, China faced criticism for its steel overcapacity in G20 summits. Chinese aluminum overcapacity was also mentioned in the G7 meeting in 2018.

Next, we’ll discuss how metals could play out amid the trade war.

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