New US tariffs may prompt stainless steel imports spike

Donald Trump’s threat of increased tariffs could provide a short-term uptick in stainless steel imports into the United States, undermining domestic steelmakers’ near-term price rise aspirations.

During his presidential election campaign, president-elect Trump spoke of his intention to boost domestic manufacturing and raise funds through the application of new import tariffs. Raising the cost of imports should increase the appeal of US-produced goods. Tariffs of up to 60% on Chinese goods and a blanket rate of 10-20% on imports from other countries were suggested. 

Furthermore, possible increases to the existing 25% Section 232 tariff implemented during Trump’s previous presidency, in March 2018, have been mentioned. Trump is also expected to activate a six-year renegotiation clause in the US-Mexico-Canada Agreement (USMCA), which he agreed in 2018. 

“Pre-Trump import packages” 

MEPS’s research respondents in the United States say that stainless steel importers have been attempting to turn the risk of added costs into a sales opportunity with the offer of “pre-Trump import packages”. Some are also making efforts to speed up deliveries to ensure their arrival before new import tariffs can be imposed. 

• This content first appeared in the November edition of MEPS International's Stainless Steel Review. The publication features market insight, stainless steel prices, indices and forecasts from key markets in Europe, Asia and North America. Visit mepsinternational.com or contact MEPS for details of how to subscribe.

Stainless steel imports into the US totalled 933,615 tonnes last year, 18.1% down on 2022’s 1.14 million tonnes. This compares to annual domestic production of 1.82m tonnes in 2023 – down 9.2% year-on-year. However, US Census Bureau data shows that stainless steel imports into the US grew by 9% year-to-date to the end of September this year, reaching 763,510 tonnes. A short-term spike in import volumes could apply further downward pressure to stainless steel prices in a US market suffering from subdued demand. 

In the longer term, the implementation of increased tariffs would raise the cost of stainless steel imports, reducing their appeal and applying upward pressure to domestic prices. Currently, MEPS’s North America stainless steel market forecast indicates that prices will decrease in December before rising in quarter one of next year. Uncertainty surrounding the Trump administration’s plans for increased tariffs presents an upside risk to that forecast. 

Tariffs’ effect on imports and prices 

Section 232’s introduction of 25% import tariffs resulted in an increase in US stainless steel prices. The low range of MEPS price for 304 cold rolled coil peaked at USD3,135 per tonne in July 2018, 27.7% up on January’s figure. This was the product’s highest price for almost four years. Stainless steel imports also declined following the introduction of Section 232 tariffs. Volumes fell by 30.8% between 2017 and 2019. 

Year-to-date, to the end of September this year, Taiwan (15.9%), Finland (10.9%), India (8.4%), Italy (7.0%), Vietnam (5.4%) and China (5.1%) command the largest share of US stainless steel imports. November’s research for the Stainless Steel Review revealed that MEPS’s European research partners fear the possibility of new US import tariffs more than their US counterparts. 

US market participants’ initially said that they did not expect Trump’s proposed import tariffs to be fully implemented, instead being used as a “negotiating tool” in trade discussions. He has since reasserted his intention to apply tariffs, however. 

MEPS’s contacts in the EU are concerned that reduced US export opportunities will apply downward pressure to stainless steel prices in their domestic markets. This effect would be exacerbated by growing pressure from imports as Asian steelmakers’ seek new export destinations for their own growing production volumes.