This morning in metals news, media reports indicate President Donald Trump could up the ante regarding a previously announced $200 billion tariff proposal, ArcelorMittal announced strong second-quarter financial numbers and Mexican officials are optimistic about reaching a deal on a renegotiated North American Free Trade Agreement (NAFTA).
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Raising the Stakes
According to media reports, President Trump plans to bump up the tariff rate on a previously proposed list of $200 billion in Chinese imports targeted by the administration from 10% to 25%.
The change has yet to be formally announced, but would further fan the flames of a burgeoning trade conflict between the U.S. and China.
The news comes as $34 billion in tariffs on Chinese imports already went into effect last month, while an additional $16 billion in tariffs remain under review.
ArcelorMittal Has Strong Q2
ArcelorMittal posted strong financial numbers for the second quarter, boasting net income of $1.9 billion, up 56.4% from 1Q 2018. The steelmaker’s 1H 2018 net income hit $3.1 billion, up 31.5% year-over-year.
Earnings before depreciation, interest, taxes, depreciation and amortization (EBITDA) hit $3.1 billion in Q2, a 22.3% increase from Q1. First-half EBITDA hit $5.6 billion, marking a 28.6% increase year-over-year.
“This is an encouraging set of results reflecting the structural improvements in both the global steel industry due to supply reform dynamics and within ArcelorMittal as a result of Action 2020,” said Lakshmi N. Mittal, ArcelorMittal chairman and CEO, in a press release. “The significant improvement in our balance sheet and earnings outlook has been recognised by the main credit agencies and the Company has achieved its stated aim of regaining its investment grade credit rating.”
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Optimism on NAFTA
According to a Reuters report, there is optimism vis-a-vis NAFTA, the trilateral trade agreement that has undergone several rounds and approximately a year of talks.
Juan Carlos Baker, Mexico’s deputy economy minister, commented that there is optimism regarding the talks and said that there will “hopefully” be “news coming out of Washington in the next few days.”