Uncertainty over new tariffs is "killing" US steel demand
President Trump's announcement of potential new tariffs that exceed the initial "reciprocal" rates announced on April 2 Release Day has increased uncertainty in the U.
S. steel market and risks to global trade.
Brazil, Canada, the EU, and Mexico have been notified that their tariffs could rise further if trade negotiations do not move forward before the new August 1 deadline. These "reciprocal" tariffs cannot be applied to steel imports into the United States in addition to existing Section 232 tariffs. However, higher base tariffs will lead to higher raw material costs for U.
S. steel mills, which will put upward pressure on steel prices and increase uncertainty among steel buyers in a low-demand environment.
Laura Hodges, a member of the European Parliament and an analyst of the US steel market, said: "There is no reason to raise steel prices." We have a lot of good news for steel buyers in the United States right now. Interest rates remain high, activity remains cautious, and recent tariff announcements are only exacerbating the situation.
" We continue to hear from European Parliament respondents that it is impossible to plan in conditions of uncertainty. This "wait and see" approach reduces the demand for steel."
Tariff threats are aimed at speeding up trade negotiations
Trade negotiations are going slower than the US government expected. Initially, the deadline was set for July 9, after which mutual tariffs for specific countries exceeding the base rate of 10% would take effect. Last week, this deadline was extended until August 1.
To speed up negotiations, the US government has sent letters outlining new base tariff rates to more than 20 countries and the EU. The rate for Brazil has been raised to 50%, while the EU now faces a 30% tariff instead of 20% if no progress is made in trade negotiations. Tariffs on Mexico and Canada have been increased to 30% and 35%, respectively, although they apply only to goods that do not comply with the Agreement between the United States, Mexico and Canada. .
So far, only two preliminary trade deals have been announced - with the UK and Vietnam. Of these, only the agreement with the UK has been officially announced, and some parts of this deal are now under threat. The UK has achieved a 25% reduction in tariffs on steel imports to the United States. However, this exception was due to the conditions that the country's government must meet by the July 9 deadline. An official announcement has not yet been made, and there remains a risk that US tariffs on steel imports from the UK may return to the full 50% rate under the section