SMU Trends Analysis: Expect Imports to Rise on Section 232 Indecision

SMU asked: Do you believe there will now be a pickup in foreign steel imports due to the slowdown in the Section 232 decision? Two-thirds of the respondents said yes, one-third said no. Following is a sampling of some insightful comments:

· “Yes, yes, yes, there is zero doubt [imports will increase].” Service Center/Wholesaler

· “We already witnessed a pickup in import offerings this week.” Service Center/Wholesaler

· “Sept./Oct. arrivals will be quiet, then build up taking into consideration seasonal lulls. The pickup will be in April/May/June arrival numbers. HRC is an exception, as most key players are locked out and volumes will be subdued.” Trading Company

· “I believe the trading companies will be more willing to import, but I’m concerned that a lot of demand was already pulled forward due to concerns over 232. It will take a while to work back down the recent surge of foreign buys from people trying to get ahead of 232.” Service Center/Wholesaler

· “There will not be an increase in imports, but in offers. It would be hard to increase imports from current levels as they were elevated to offset possible penalties or deadlines relative to 232. Imports will decline precipitously in the near term, before arrivals from new offers balance things out.” Manufacturer

· “I think there will be imports continuing in the normal course, with the awareness that Section 232 could affect the ultimate landed cost.” Service Center/Wholesaler

· “The administration is unpredictable. It could impose tariffs on a whim at any point. People will be cautious.” Service Center/Wholesaler

Should U.S. Penalize Exporters?

In the second question, SMU asked: Do you think the U.S. government should penalize countries that have a high rate of steel exports to the U.S., in the name of national security? Three out of four respondents said no, only countries whose producers violate U.S. trade laws should be targeted. Many are skeptical the U.S. can make a legitimate case that steel imports threaten the nation’s security. Following are their comments:

· “Tough question, but there is no country in the world that would sit by and allow imports to capture so much market share. The national security argument seems to be a reach.” Service Center/Wholesaler

· “Always put the USA first. However, if U.S. companies were not buying, then foreign countries couldn’t be exporting. The U.S. mills need to keep U.S. companies competitive so we don’t have to buy foreign. U.S. mills claim to be the backbone of the U.S. economy. Seems to me they have a responsibility to keep us competitive in the marketplace and not dictate the price, take it or leave it. We can’t be a captive customer to the domestic mills if they can’t keep us competitive.” Manufacturer

· “They should penalize government-subsidized dumpers.” Steel Mill

· “If they are breaking our laws, then we should blast them.” Service Center/Wholesaler

· “I think they should penalize, but it has nothing to do with national security.” Service Center/Wholesaler

· “We need to do something, but it seems disingenuous to use national security as an excuse.” Service Center/Wholesaler

· “Exporters should be penalized if they are dumping steel. The national security argument is really tied to economic security.” Service Center/Wholesaler

· “It’s ridiculous to tie steel imports to national security threats. There’s no connection. File trade cases if they see unfairly traded products, don’t use some fake tool.” Trading Company

· “I’m certain we are not using Galvalume coil to build tanks. Trump needs to stay out of international trade until he learns something about it.” Manufacturer

· “Foreign mills should only be penalized if they are being subsidized or selling below their landed costs to the U.S.” Service Center/Wholesaler

· “There are plenty of tariffs already in place to combat the dumping of steel into the U.S. market. Section 232 is not the way to handle dumped steel.” Manufacturer

· “It’s ridiculous to tie steel imports to national security threats. There’s no connection. File trade cases if they see unfairly traded products, don’t use some fake tool.” Trading Company

· “It’s not a national security problem yet. It’s an economic problem right now. No one wins by being an isolationist, especially manufacturing.” Toll Processor

· “Section 232 will only give the U.S. mills license to artificially raise prices, which will have a much greater impact downstream.” Manufacturer