Will Trump’s Trade War Affect UK Metals Prices?
At Metalex we stock stainless steel, aluminium sheet, carbon steel and more, so it matters what’s going on out there in the wider world.
Are we heading for a Trump-ignited metals trade war? Or are we already there?
A trade war happens when countries try to damage each other’s trade via tariffs, taxes and restricted quotas. And like all wars, they benefit nobody. When the affected countries impose their own fees on imports, and the others retaliate, things spiral, prices are forced up and the man in the street suffers just as much as business.
The China-US argument rumbles on. Trump imposed aluminum and steel tariffs in March to protect American industry. Then he imposed a 25% tariff on $50 – $60 billion of Chinese exports to the US including aerospace, information technology, and machinery. China bit back, applying fees to a wide range of US exports including scrap aluminum. Trump threatened tariffs on well over a thousand Chinese products and as if by magic, China retaliated with tariffs on Boeing planes. Both parties seem reluctant to give up, so the war continues.
How will British steel and aluminium prices react to Trump’s tariffs?
If you’re concerned about how all this might affect steel and aluminium prices in Britain, you’re not alone. Trump’s tariffs on steel and aluminium imports in Europe and North America have been described as both disappointing and absurd by Britain’s Trade Secretary Liam Fox. He was outraged by the 25% tax on steel and a 10% tax on aluminium from the EU, Mexico and Canada. UK Steel itself concurred, saying that tariffs will damage the US economy just as badly as it will our home-grown steel sector. And the EU is planning to add fuel to the fire, joining China with potential tariffs of its own.
A resolution is particularly important because the UK steel industry, which has already suffered in recent years, sends 7% of steel exports go to the US in deals worth a total of £360 Million. In the meantime President Trump stands by his tariffs on grounds of national security, insisting that the world’s over-supply of steel and aluminium, which he feels is China’s responsibility, threatens his own nation’s producers.
As far as metals go, the existing tariffs apply to a wide range of steel and aluminium products including the metals in sheet form, as plate, bar, pipe and semi-finished. It will make steel and aluminium exported from Britain to the US more expensive for Americans to buy, which will lead to a reduction in demand. And that’s when jobs on both sides of the Atlantic start to go.
Steel and aluminium prices are unlikely to increase because of the tariffs and trade war, which Trump denies but is clearly happening. Low demand usually means prices drop. It’s not bad news for metal buyers per se, but it’s bad news for the steel and aluminium industries, the metal supplies sector and the overall economy. Hang on to your hats…
Whatever happens Metalex will be here to provide you with the very best value metal processed and delivered to you exact requirements.