Trumps Taxes and UK Metal Markets
Earlier this month it was announced that Donald Trump is set to impose a 25% tax on steel imports and a 10% tax on aluminium making its way onto US soil.
The move illustrates how the presidents ‘America first’ campaign is gaining momentum and the tax is due to be increased despite fierce lobbying for UK cabinet ministers who have fought to be trade partners with the US since deciding to the European Union. At the moment it is not yet sure whether the tax will be implicit on global imports or if it will affect only a select number of countries such as China and India.
What Could This Mean for UK Manufacturers?
If this tax is slapped onto UK exports of steel and aluminium, reports suggest that up to £360 million worth of metal could be affected.
As an industry that has struggled in the wake of the financial crash, steel production has dropped by almost 8,000 tonnes since the start of the millennium according to the International Steel Statistics Bureau. With the recent Tata steel problems and the negotiation trade in the ‘Brexit’ it is clear that this is a concerning period of change for those in the metal production industries like ourselves.
Just one day after the tax hike was announced the markets slumped with the Dow Jones Industrial average down by 322 points or 1.2%.
However, the economist has predicted that the tax might backfire as it states there are more people in the steel consumption that will suffer because of the high prices, than their or in steel production, who would benefit from increased business.
Why The Tax?
Anyone who kept up with Donald Trump’s presidential campaign will be aware that steel imports from China were a big ‘issue’ he pledged to resolve if he was elected. Now he is in power it seems he is keeping true to his promise. China was reportedly supplying half of the world’s steel in 2017 and because this production was weighing down the stock exchange, the international metal markets dipped. As the steel China was producing was so cheap, companies and manufacturing plants across the world snapped up this bargain material instead of opting for their local suppliers, meaning these smaller companies missed out on business and had to slow their output as a result.
Only time will tell what the effect of these taxes will have on the global metal markets, but for now, we will keep providing our high-quality stainless steel and aluminium amongst other materials. Browse our website to view our stocks or call us on 0800 123 7010.
