Fears Over US Steel Tariffs May Be Unfounded
One key feature of Trump’s 2016 presidential campaign was his focus on protecting American jobs against the threat of global trade. During his controversial campaign, he repeatedly threatened to impose tariffs on imported goods in the US.
In March 2018, the 45th President of the United States followed through with this pledge by imposing tariffs on imported steel – with a 25% tax levied on European steel.
American steel producers currently find it cheaper to import from the rest of the world, so many US citizens have begun to feel as though they are losing out and that cheaper imports have brought about the decline in the US steel industry.
The Trump administration believes that higher tariffs will cause US businesses to purchase domestically produced steel, which they claim will revitalise the steel industry and provide jobs for rust belt areas that have been hit hardest by the decline in manufacturing.
This has caused concern across Europe, with talk of the economic damage these tariffs could have on the European steel industry.
However, a lot of the apprehension expressed in the media over the past few months may be unfounded as European steels exports only make up a small percentage of the total imported steel in the US.
Looking at figures from the Global Steel Trade Monitor, it is evident that the US is not as dependent on European steel as some may suggest.
In total, the United States imported steel from 85 countries and territories in 2017, with the top 9 countries accounting for 75 percent of US steel imports.
Canada accounts for the largest amount of imported steel at 20%, followed by Brazil at 13%, South Korea at 11%, Mexico at 11% and Russia at 7%.
Germany, the largest EU exporter of steel to the US, makes up just 3% of total US steel imports. These figures show that US is far from dependant on European steel.
Although there may be dangers of countries imposing their own trade tariffs on American goods, leading to a trade war, the direct impact of these new tariffs on the European steel industry may not be as dramatic as suggested.
Source: https://www.trade.gov/steel/countries/pdfs/imports-us.pdf
