菜单

Panjiva_research_logo

Slow and Steady Wins The Race for Steel Tariff Relief

Materials - Metals/Mining 485 Metals - Aluminum 161 Metals - Steel 363 Tariffs 1177 U.S. 3315 USMCA 374

Nearly one year on from the initial imposition of section 232 duties on steel and aluminum there are still new applications being made for exclusions from U.S. importers. Panjiva analysis* of government filings for steel and aluminum shows 112,802 filings were made as of Mar. 8, 89% of which relate to the 25% duties on steel imports.

The process of gaining approvals is slow, however, with 74.8% of all cases still pending, including some outstanding from as early as March 2018. For context in the past 15 working days since the prior analysis was carried out a total of 2,957 decisions were processed – at that rate it will take around 20 months to clear the backlog.

APPEALS TAILING OFF, BUT STILL NOT OVER

Chart segments appeals for exemptions from section 232 duties by month of filing. Calculations based on BIS filings for steel and aluminum.  Source: Panjiva

The wait is worthwhile, however, with 72.7% of all decisions in steel being granted and 86.5% in aluminium. An added layer of uncertainty comes for importers from Canada, Mexico and the European Union.

As discussed in Panjiva research of Feb. 25 the Canadian and Mexican governments have made it clear they want the tariffs to be removed before the U.S.-Canada-Mexico Agreement can be ratified. Similarly European Union officials have stated that they want the tariffs removed as a precursor to negotiations on a wider trade deal.

APPEALS PROCESS LONG, BUT WORTH IT

Chart segments appeals for exemptions from section 232 duties by month of filing. Calculations based on BIS filings for steel and aluminum.  Source: Panjiva

Tariff leniency hasn’t resulted in continued import growth though. U.S. seaborne imports of all steel and aluminium products dropped 2.4% year over year in the first two months of 2019 after falling rising 8.6% in 4Q, Panjiva data shows. Most of the major steel suppliers have seen a similar pattern including ThyssenKrupp, down 16.3% in the first two months of the year, Schaeffler (14.4% lower) and Voestalpine (down 2.1%).

DEMAND, NOT TARIFFS, DRIVING IMPORT BEHAVIOR

Chart segments U.S. seaborne imports of steel and aluminum by shipper on a monthly and three-month average basis.  Source: Panjiva

* Data available on request from support@panjiva.com

PANJIVA RESEARCH is a service provided by Panjiva, Inc. ("Panjiva") to relevant global subscribers, and are deemed to be Panjiva "Services" subject to the Panjiva Terms & Conditions of Use. Information contained within or made available via the Services is for informational purposes only and nothing in the Services shall constitute or be construed as an offering of financial instruments, or as investment advice or recommendations by Panjiva, Inc. or its affiliates of an investment strategy or whether to "buy", "sell" or "hold" an investment. The Services may include views and commentary about customers of Panjiva. No aspect of the Services is based on consideration of your individual circumstances, and you should determine on your own whether you agree with the information contained within or made available via the Services. Employees involved in Panjiva Research may hold positions in securities analyzed or discussed in the Services. Panjiva does not make any express or implied warranties, representations, endorsements or conditions with respect to the Services and the information contained within or made available via the Services, including without limitation, warranties as to the usefulness, completeness, accuracy, currentness, reliability or sufficiency of any information (including, without limitation, conclusions, statements, opinions, estimates, forecasts or projections of any kind) and expressly disclaims any implied warranties. Neither this disclaimer nor any of its contents may be forwarded or redistributed without the prior written consent of Panjiva. © 2019 Panjiva, Inc. All Rights Reserved.