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Countries most exposed to the new tariffs on steel and aluminium imported into the USA

On March 8th 2018, President Trump announced a new controversial order imposing tariffs of 25% on steel and 10% on aluminium imported into the USA, extending the list of aggressive policies taken by his administration. With these tariffs, expected to enter into effect within 15 days from the announcement and which will exempt Canada and Mexico, Mr Trump aims to boost US industry, ending the suffering from "unfair trade".

The following tables show the countries that we estimate are the most likely to be affected by the tariffs on steel and aluminium.

Table 1 – Steel* imported into the USA in 2017 by exporting countries, tonnes and values

Origin EU/Non-EU

Major exporting countries

Tonnes

'000s US$

% of total steel imported into the USA

% of total export to the USA

Tonnes

'000s US$

Tonnes

'000s US$

Non-EU

Canada

5,950,822

5,605,550

13%

15%

1%

2%

Brazil

6,102,309

3,284,719

14%

9%

17%

11%

South Korea

3,554,106

3,254,679

8%

9%

21%

5%

Mexico

3,286,922

2,711,457

7%

7%

3%

1%

Russia

5,939,544

2,700,878

13%

7%

21%

16%

China

1,142,349

1,940,778

3%

5%

1%

0%

Japan

1,779,505

1,903,434

4%

5%

15%

1%

Taiwan

1,156,380

1,388,990

3%

4%

16%

3%

Turkey

1,801,455

1,113,691

4%

3%

26%

13%

India

971,490

1,078,299

2%

3%

8%

3%

All others

7,505,484

5,540,772

17%

15%

2%

1%

Non-EU Total

 

39,190,366

30,523,246

88%

82%

4%

2%

EU

Germany

1,339,061

1,676,625

3%

4%

11%

1%

Italy

552,760

894,172

1%

2%

8%

2%

Sweden

339,255

550,382

1%

1%

10%

5%

Netherlands

645,318

530,309

1%

1%

9%

3%

United Kingdom

356,849

522,073

1%

1%

4%

1%

France

284,477

495,852

1%

1%

5%

1%

Austria

275,913

493,283

1%

1%

18%

4%

Spain

445,619

431,699

1%

1%

5%

3%

Czech Republic

126,961

202,479

0%

1%

20%

5%

Belgium

130,823

181,215

0%

0%

2%

2%

All others

715,591

778,956

2%

2%

5%

1%

EU Total

 

5,212,627

6,757,045

12%

18%

7%

2%

Grand Total

 

44,402,993

37,280,291

100%

100%

4%

2%

*SITC2D 67
Source: MDS Transmodal World Cargo Database, 26.02.2018

Table 2 – Aluminium* imported into the USA in 2017 by exporting countries, tonnes and values

Origin EU/Non-EU

Major exporting countries

Tonnes

'000s US$

% of total aluminium imported into the USA

% of total export to the USA

Tonnes

'000s US$

Tonnes

'000s US$

Non-EU

Canada

2,965,988

6,999,775

43%

41%

1%

2%

China

628,389

1,760,600

9%

10%

1%

0%

Russia

746,236

1,575,918

11%

9%

3%

9%

UAE

660,487

1,388,331

9%

8%

18%

34%

Bahrain

248,012

588,759

4%

3%

43%

60%

Argentina

264,072

546,672

4%

3%

7%

11%

India

169,789

370,403

2%

2%

1%

1%

South Africa

137,480

340,465

2%

2%

5%

5%

Qatar

118,027

307,047

2%

2%

6%

26%

Mexico

67,071

238,769

1%

1%

0%

0%

All others

660,001

1,813,767

9%

11%

0%

0%

Non-EU Total

 

6,665,552

15,930,506

96%

93%

1%

1%

EU

Germany

90,654

386,599

1%

2%

1%

0%

France

42,610

216,011

1%

1%

1%

0%

Austria

36,415

157,579

1%

1%

2%

1%

Italy

23,888

86,259

0%

1%

0%

0%

Spain

30,051

77,045

0%

0%

0%

0%

Greece

20,416

68,113

0%

0%

1%

5%

Belgium

11,167

59,484

0%

0%

0%

0%

United Kingdom

14,777

55,637

0%

0%

0%

0%

Netherlands

8,123

40,696

0%

0%

0%

0%

Sweden

9,650

40,253

0%

0%

0%

0%

All others

9,332

49,155

0%

0%

0%

0%

EU Total

 

297,083

1,236,831

4%

7%

0%

0%

Grand Total

 

6,962,635

17,167,337

100%

100%

1%

1%

* SITC5D 68411, 68412, 68421, 68422, 68423, 68424, 68425, 68426, 68427
Source: MDS Transmodal World Cargo Database, 26.02.2018

The European Union (and Germany in particular), Brazil and South Korea are the main areas expected to suffer the most from the new tariffs on steel whereas for aluminium we identify China, Russia, the UAE and Bahrain as the most likely countries to suffer the consequences of the tariffs.

Based on our latest trade data (World Cargo Database) we estimated that in 2017 the EU exported approximately 5.2m tonnes of steel to the USA, equating to circa $6.8bn and accounting for 12% and 18% respectively of the total volume and value of steel imported into the USA; Brazil exported 6.1m tonnes (value: $3.3bn) circa 14% of total steel imported into the USA; South Korea exported 3.6m tonnes ($3.2bn 8% of USA’s import of steel. Together these economies exported 33% of the total steel imported into the USA (36% of its value). Altogether the USA imported 44m tonnes of steel in 2017 as compared with a domestic production of around 82m tonnes.

Aluminium exports to the USA are not large for the whole of the EU area. Within the block, however, we estimate that Greece could suffer from the tariffs. As shown in Table 2, we estimate that in 2017, 5% of Greece’s exports (in value terms) to the USA was aluminium. Outside the EU, we estimate that the UAE exported 0.7m tonnes of aluminium to the USA (equating to $1.4bn) and Bahrain moved some 0.3m tonnes (equating to $0.6bn). Although the volumes of aluminium moved from the UAE and Bahrain to the USA do not seem impressive, in percentage terms they represent an important part of their overall exports to the USA.  We estimate that aluminium accounted for 34% and 60% respectively of UAE and Bahrain’s overall exports to the USA.

Focusing on the UK, we estimate that in 2017 it exported 0.3m tonnes, equating to $0.5bn, to the USA, approximately 1% of the total USA’s imports of steel, both in volume and value terms, and 4% of total UK exports. The volumes of aluminium exported by the UK to the USA are negligible.

The most significant steel volumes broken down by their 5-digit SITC categories exported from the UK to the USA are listed in the following table.

Table 3 – Main SITC at 5-digit exported by the UK to the USA in 2017 – steel

SITC5D

SITC5D text

Tonnes

'000s US$

% of total steel imported into the USA

Tonnes

'000s US$

67281

Semi-finished products of alloy steel, of stainless

35,771

72,105

10%

14%

67573

Flat-rolled products of alloy steel, n.e.s other alloy

55,989

66,127

16%

13%

67688

Angles, shapes and sections, of other alloy steel

35,449

31,984

10%

6%

67941

Line pipe of a kind used for oil or gas pipelines

32,706

24,353

9%

5%

67619

Bars and rods, hot-rolled, in irregularly wound coils

36,605

21,706

10%

4%

67682

U,I,H,L or T sections, not further worked than hot

32,308

18,163

9%

3%

67615

Bars and rods, hot-rolled, in irregularly wound coils

5,489

18,102

2%

3%

67629

Bars and rods,  of iron or steel

16,428

17,638

5%

3%

All others

 

106,104

251,895

30%

48%

Grand Total

 

356,849

522,073

100%

100%

Source: MDS Transmodal World Cargo Database, 26.02.2018

At this stage it is premature to say with certainty how the countries that could be affected by the new tariffs will respond, but they have already expressed their outrage at Trump’s plans. Reciprocal tariffs on significant American export goods appear likely to follow. The European Union (EU), for instance, has already identified three key American products on which tariffs could be imposed: Kentucky bourbon, blue jeans and motorcycles. As for the UK, although the USA is not a major partner country for these two commodities, these tariffs could give a taste of the sort of trade policies it might have to negotiate as a non-EU member.