Imports of steel to the United States dropped off considerably in February, both on a sequential and year-over-year basis, according to the latest figures from the American Institute for International Steel (AIIS).
U.S. steel imports stood at 2.36 million net tons for the month, an 18 percent drop compared with January and a 13 percent decline compared with February 2017.
So far this year, aggregate steel imports have fallen 5.4 percent to 5.24 million net tons compared with the first two months of 2017.
AIIS noted these most recent figures come just a short while after the enactment of a 25 percent tariff on steel imports from any country that hasn’t already been granted an exemption by the United States.
In February, imports from Canada, which along with Mexico has been exempted from the tariff pending the successful renegotiation of the North American Free Trade Agreement (NAFTA), fell 10.5 percent from January to 499,000 net tons, but were still up 2.3 percent compared with the same 2017 period. Imports from Mexico, on the other hand, slid 32.5 percent from the previous month and 14.2 percent year-over-year to 225,000 net tons.
In a separate statement, AIIS noted the importance of both Canada and Mexico to the U.S. steel market and argued in favor of providing exemptions to other strategic trading patterns as well.
“A big reason why the United States ships so much steel to Canada and Mexico is the North American Free Trade Agreement, yet the Trump administration has at times expressed eagerness to scrap what the president has derided as ‘the worst trade deal maybe ever signed anywhere,’” the association said. “Negotiations for a revised NAFTA are reportedly showing some promise, though, and Trump at least acknowledged the important trading relationships with Canada and Mexico by temporarily exempting those countries from his execrable plan to impose 25 percent tariffs on all steel imports.
“This is not enough, however,” the group added. “With other nations already indicating that they will retaliate by imposing tariffs of their own on billions of dollars in American goods, advocates of protectionism must finally acknowledge that forcing a reduction in imports will inevitably cut exports, as well.”
Imports from South Korea and Brazil, both major steel trading partners of the United States, also saw monthly declines, falling 18.4 percent and 36.4 percent, respectively, from January to 277,000 net tons and 238,000 net tons. South Korean imports, however, were up 5.6 percent compared to February 2017, while imports from Brazil were down 37 percent year-over-year.
On the positive side, volumes from the European Union, which has already threatened to retaliate if the trading bloc is not exempted from both the steel tariff and a similar 10 percent tariff on aluminum imports, climbed almost 9 percent to 377,000 net tons in February, a two-thirds increase from a year earlier.
But according to AIIS, the decline may be just beginning, as the recently enacted tariff “will surely drive these numbers down even more, leaving businesses and consumers to pay higher prices to subsidize the domestic steel industry.
“And the impact will be felt far beyond the steel sector,” the group added. “China has released a list of 128 American products on which it may impose tariffs in retaliation. One of the biggest Chinese targets is soybeans, with that country importing $14 billion worth of the foodstuff last year. Retaliating against American soybean shipments would have a devastating impact on our farm sector.
“Similarly, the potential tariff targets listed by the European Union take up 10 pages,” said AIIS. “Even a trade skirmish threatens to dampen economic growth, yet President Trump has tweeted that, ‘Trade wars are good, and easy to win.’ If history is not sufficient to show him the error of that statement, the near future surely will be.”