Articles in Category: Global Trade

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This morning in metals news, one report says President Trump could impose tariffs on China as early as this Friday, copper drops to a one-week low and a Mexican presidential candidate says failure to renegotiate the North American Free Trade Agreement (NAFTA) cannot be “fatal” for the Mexican people.

China Tariffs Could be Coming

According to a Politico report, President Trump could slap tariffs on Chinese goods as early as this Friday.

The Trump administration on Friday is planning on publishing a list of the products that will be affected, Politico reports.

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Chinese Demand Impacts Copper Price

The copper price slid to a one-week low on account of concerns about demand in China and a strengthening dollar, Reuters reported.

Labor negotiations at the Escondida mine in Chile will have a major impact going forward on the direction of the price.

Presidential Candidate Brushes Off Possible NAFTA Collapse

Negotiating teams from Canada, the U.S. and Mexico last year were hoping to reach a deal on NAFTA before elections in the three countries, including the July 1, 2018 presidential election in Mexico.

However, negotiations dragged on and a consensus on a modernized NAFTA has yet to be reached. Now, it is less than a month away until the Mexican presidential election, when the people of Mexico will choose someone to replace incumbent Enrique Peña Nieto.

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During a presidential debate this week, leftist candidate Andres Manuel Lopez Obrador said he supports the continuation of NAFTA, the 1994 trilateral trade agreement, but that its end “cannot be fatal for Mexicans,” Reuters reported.

Trade relations between the U.S. and the European Union are in a tough spot these days, as the U.S. imposed its Section 232 steel and aluminum tariffs on the 28-member bloc (plus Canada and Mexico) recently, a decision yielding much consternation from the U.S.’s trading partners.

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European Steel Association President Geert Van Poelvoorde, speaking before European Steel Day last week, addressed the issue of the U.S. tariffs.

“The European steel industry condemns the US import tariffs on steel. This protectionist trade action is absurd – it hits the US’ own allies hardest,” Van Poelvoorde said. “We also now expect to face a large loss of market share in the US, a market that accounts for 16% of EU exports.”

Van Poelvoorde also reiterated the claim that the focus should be on global overcapacity (implicitly pointing the finger at China).

“There is the need to continue discussions with the US to address the root cause of this trade dispute: global steel excess capacity,” Van Poelvoorde. “We have to deal collectively with countries that subsidise production in order to target export markets, and there are international fora for this process. Unilateral measures are not the answer.

“In the meantime, we call for an EU safeguard to be deployed as quickly as possible – the longer the delay, the greater the injury to the European steel industry will be.”

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Referring to Canadian Prime Minister Justin Trudeau, President Trump on Sunday announced his decision to withdraw from the G7 communique.

“Based on Justin’s false statements at his news conference, and the fact that Canada is charging massive Tariffs to our U.S. farmers, workers and companies, I have instructed our U.S. Reps not to endorse the Communique as we look at Tariffs on automobiles flooding the U.S. Market!” he tweeted.

Then, on Sunday, German Chancellor Angela Merkel announced the E.U. plans to strike back against the U.S. steel and aluminum tariffs with duties of its own, Reuters reported.

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This morning in metals news, Germany announced the E.U. would also enact trade measures against U.S. steel and aluminum, Austrian company Voestalpine says there are delays in the tariff exclusion request process, and exemptions are looking increasingly unlikely for Europe.

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Merkel Says E.U. Will Retaliate With Tariffs on U.S. Steel, Aluminum

German Chancellor Angela Merkel said the E.U. plans to retaliate on the U.S. steel and aluminum tariffs with tariffs of its own, Reuters reported.

The announcement capped a tense weekend, during which President Trump and Canadian Prime Minister Justin Trudeau have sparred over trade and the president tweeted that he would not endorse the G7 communique.

Delays in Section 232 Exemption Requests

Austrian firm Voestalpine has yet to receive a response from the U.S. with respect to its Section 232 tariff exclusion requests, Reuters reported.

According to the report, the firm said about one-third of its U.S. sales would be affected by the U.S. tariffs, which went into effect June 1 for the E.U. (after the expiration of a temporary exemption).

Exemptions for E.U.?

European officials are still figuring out how to negotiate an exemption from the U.S. steel’s and aluminum tariffs, as the bloc’s temporary exemption from the tariffs expired and the U.S. decided to impose them ahead of the June 1 deadline.

But, according to Platts, exemptions are looking increasingly unlikely.

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Even so, some European steelmakers are still planning on shipping to the U.S., even with the tariffs eating into their margins.

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Before we head into the weekend, let’s take a look back at the week that was and some of the stories here on MetalMiner:

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MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel

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This morning in metal news, steel and aluminum exports from China were up in May; the National Retail Federation CEO panned the U.S.’s tariffs; and a White House economic analysis reportedly concludes President Trump’s tariffs will hurt economic growth.

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Exports on the Rise

Despite rising trade tensions, including Section 232 tariffs on steel and aluminum, China’s export totals of steel and aluminum were both up in May, according to Reuters.

Chinese aluminum exports were at their highest level in 3 1/2 years, according to the report.

NRF CEO Criticizes Tariffs

Matthew Shay, president and CEO of the National Retail Federation, was critical of the Trump administration’s trade agenda vis-a-vis tariffs, CNBC reported.

Shay, who spoke positively about the president’s December tax cut, argued the tariffs are counterproductive.

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“It makes no sense to go down this road when we have all this momentum,” Shay told CNBC.

White House Economic Analysis Bearish on Tariffs

According to a report by The New York Times, a White House economic analysis of the impact of Trump’s tariffs concludes they will hurt economic growth.

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This morning in metals, the European Union has seen its level of imports surge in 2018, a Republican Senator has unveiled a bill that seeks to check the president’s authority on tariffs and the E.U. plans to impose tariffs on the U.S. next month.

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EUROFER Links U.S. Tariffs With Import Rise

In light of the U.S.’s decision to impose its aluminum and steel tariffs on the E.U. (after the deadline on the 28-member bloc’s temporary exemption came and went June 1), the European Steel Association (EUROFER) says the E.U.’s steel exports have jumped 8% this year, Reuters reported.

The association argues that the import surge is directly attributable to the redirecting of supplies into Europe (as a result of the U.S.’s Section 232 tariffs).

“The European steel industry condemns the US import tariffs on steel. This protectionist trade action is absurd – it hits the US’ own allies hardest,” said Geert Van Poelvoorde, president of EUROFER, in a release Thursday. “We also now expect to face a large loss of market share in the US, a market that accounts for 16% of EU exports.”

Corker Introduces Bill to Check President’s Tariff Authority

It has been a big year for tariffs in the world of metals, an arena in which the office of the president has quite a bit of power.

Sen. Bob Corker (R-Tenn.), however, has introduced a bill that would seek to limit the president’s power with respect to tariffs, the Washington Post reported.

According to the bill, the president would have to win congressional approval if he plans to enact tariffs on the grounds of national security, the Post reported.

E.U. Plans Retaliatory Tariffs

The E.U. will slap $3.3 billion in tariffs on U.S. goods next month, according to a CNN report.

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E.U. Trade Commissioner Cecilia Malmstrom called the U.S. steel and aluminum tariffs “unilateral and illegal,” according to the report.

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This morning in metals news, Chinese steel exporters are looking for new destinations for their products, U.S. Steel is planning on restarting another Illinois blast furnace and steel production is up 1.9% in the year to date.

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Looking For Buyers

On the heels of U.S. trade actions, Chinese steelmakers are looking to find buyers in Africa and South America for their products, Reuters reported.

According to the report, Chinese exports to markets like South Korea and Vietnam have dropped by double digits since last year.

U.S. Steel to Restart Another Blast Furnace in Illinois

After an announcement of the restarting of a blast furnace earlier this year, on Tuesday U.S. Steel announced plans to restart another blast furnace at its Granite City plant in Illinois, MarketWatch reported.

The steelmakers plans to have the furnace up and running by Oct. 1, bringing on 300 more workers in the process, according to the report.

Steel Production on the Rise

U.S. steel production for the year to date is up 1.9%, the Times of Northwest Indiana reported, citing American Iron and Steel Institute (AISI) data.

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For the week ending June 2, production was up 0.76% from the previous week, according to the report.

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This morning in metals news, Mexico hits back against the U.S.; tariffs aren’t good for relationships with allies, the Aluminum Association’s CEO says; and the E.U. could impose steel and aluminum safeguard measures as early as July.

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Mexico Hits Back

Retaliation on the heels of the U.S.’s decision to allow for the expiration of the temporary tariff exemptions for the E.U., Canada and Mexico is something that was expected.

Mexico did just that, placing tariffs on steel products and farm products, according to an NPR report.

According to the report, the steel products on the list are steel plates, bars and rods, and rolled steel.

Tariffs Don’t Make Friends

The Aluminum Association, the industry group representing American aluminum, has consistently expressed over the last year that any trade remedies vis-a-vis aluminum should focus primarily on Chinese overcapacity and should not harm market-economy trading partners.

Heidi Brock, CEO of the Aluminum Association, told NPR’s Rachel Martin that the tariffs could alienate the U.S. from its allies.

“In our view, illegally subsidized Chinese overcapacity is the problem,” Brock told NPR. “Tariffs and quotas on market economies really, in our concern, would be ultimately alienating allies that we need to help us on that problem.”

Needless to say, based on rhetoric since June 1 from the E.U., Canada and Mexico, it seems like that alienation has already begun to take shape.

Meanwhile, in Europe…

Speaking of retaliation, the E.U. could be set to do just that in the near future.

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E.U. Trade Commissioner Cecilia Malmstrom told Reuters that steel and aluminum safeguard measures could be instituted next month.

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This morning in metals news, Canada is searching for its response to the expiration of its exemption from the U.S.’s steel and aluminum tariffs; President Trump’s top economic adviser said Canadian President Justin Trudeau is “overreacting” to the news; and copper rises as negotiations begin at BHP’s Escondida mine in Chile.

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Canada Considers Options to Aid Domestic Industry

On the heels of the expiration of Canada’s temporary exemption from the U.S.’s steel and aluminum tariffs, the country is considering ways to lessen the blow for its domestic industry.

According to a Reuters report, Canada is considering aid for its domestic steel and aluminum industry, similar to what it offered its softwood lumber industry on the heels of a U.S. tariff on that product last year.

Kudlow: Trudeau Is ‘Overreacting’

Larry Kudlow, Trump’s top economic adviser, said Canadian President Justin Trudeau was “overreacting” on the heels of the tariffs expiration, according to a Washington Post report.

“These tariffs may go on for a while or they may not,” Kudlow was quoted as saying.

Copper Price Rises

Labor negotiations at the world’s largest copper mine and a weakening dollar contributed to a rise in the copper price, Reuters reported.

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According to the report, the price rose to its highest level since May 23.

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Before we head into the weekend, let’s take a look back at the week that was and some of the stories here on MetalMiner:

Need buying strategies for steel? Try two free months of MetalMiner’s Outlook

MetalMiner’s Annual Outlook provides 2018 buying strategies for carbon steel