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Section 232: Import Steel Tariffs Explained

Below is a short guide to the changing dynamics of the steel and steel pipe market due to steel tariffs and quotas placed on import steel mill materials. Please keep visiting our blog for updates and commentary as we continue to evaluate the Steel Pipe market going forward.

What Is Section 232

In the Trade Expansion Act of 1962 (click here for the full text), Section 232 covers investigations that help to determine the effects of imports on America’s national security.  Section 232 gives the President of the United States the ability to address any threats to national security by restricting imports through tariffs. At its core, this investigation assesses the ability of the US to be self-sufficient in the manufacturing of steel products we rely on for national defense, as well as the assessing of import steel products for use in national security concerns like infrastructure, weapons, navy ships, etc.

2018 Section 232 Steel Investigation

On April 20, 2017, President Donald Trump signed a presidential memorandum calling on Secretary Wilbur Ross to prioritize a Department of Commerce investigation into the effects of steel imports on US national security. This study has been concluded, and considered overcapacity, dumping, illegal subsidies and other factors. The results of the study, which looked to determine whether steel imports threaten American economic security and military preparedness, are as follows:

Key Findings of the Steel Report:

  • The United States is the world’s largest importer of steel. Our imports are nearly four times our exports.
  • Six basic oxygen furnaces and four electric furnaces have closed since 2000 and employment has dropped by 35% since 1998.
  • World steelmaking capacity is 2.4 billion metric tons, up 127% from 2000, while steel demand grew at a slower rate.
  • The recent global excess capacity is 700 million tons, almost 7 times the annual total of U.S. steel consumption. China is by far the largest producer and exporter of steel, and the largest source of excess steel capacity. Their excess capacity alone exceeds the total U.S. steel-making capacity.
  • On an average month, China produces nearly as much steel as the U.S. does in a year. For certain types of steel, such as for electrical transformers, only one U.S. producer remains.
  • As of February 15, 2018, the U.S. had 169 antidumping and countervailing duty orders in place on steel, of which 29 are against China, and there are 25 ongoing investigations.

Recommendations of the Steel Report:

  1.  A global tariff of at least 24% on all steel imports from all countries, or
  2.  A tariff of at least 53% on all steel imports from 12 countries (Brazil, China, Costa Rica, Egypt, India, Malaysia, Republic of Korea, Russia, South Africa, Thailand, Turkey and Vietnam) with a quota by product on steel imports from all other countries equal to 100% of their 2017 exports to the United States, or
  3.  A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

Actions Resulting From the Steel Investigation

On March 8, 2018, the President issued Proclamations on Adjusting Imports of Steel and Aluminum into the United States, under Section 232 of the Trade Expansion Act of 1962, providing for additional import duties (tariffs) for steel mill and aluminum articles, which went into effect on March 23, 2018. These duty requirements are effective with respect to goods entered, or withdrawn from warehouse for consumption, on March 23, 2018.

The President issued further Proclamations on Adjusting Imports of Steel and Aluminum into the United States on April 30 and May 31, 2018, all of which are effective now.

Tariffs

As of June 1, 2018, all countries of origin except Argentina, Australia, Brazil, and South Korea are subject to these steel tariffs.

Quotas

As of June 1, 2018, Argentina, Brazil, and South Korea are excluded from tariffs, but subject to absolute quotas on steel mill materials exported into the US.

Exclusions

Some countries, like Canada and Mexico during North American Free Trade Agreement (NAFTA) negotiations, were initially excluded from all steel tariffs and quotas. However, they are now subject to tariffs on all steel mill material being exported into the US.

China is not subject to steel tariffs, but only because all direct Chinese import steel mill materials have been BANNED. This has been the case for many years, as this is covered by anti-dumping regulations (click to learn more).

What do steel tariffs mean for Steel Pipe?

  • Expect price increases on all steel pipe, as well as strut, rod and metal conduit
  • Allocation of Import Steel products
  • Reduction on available Canadian Steel products
  • Import Steel customers may have the need for Domestic Steel pipe based on availability
  • Domestic prices will likely climb and lead times will get stretched
  • Be sure to keep visiting our blog for more updates and commentary as we continue to evaluate the Steel Pipe market going forward

See Our List of Steel Pipe Products

Use Our Services to Lessen Your Risk

We continue to recommend that you use our services as a weekly pipe distributor to lessen the risk associated with these volatile commodity products. With United Pipe & Steel, buy what you need, when you need it, and:

  • Break bundles
  • Mix and match all products to make weight minimums
  • Take advantage of milk run delivery schedules
  • Schedule Jobsite deliveries anywhere within our 12 Distribution Center Network
  • Get MTRs for all Steel pipe orders

Please call us with your Copper Tube, PVC Pipe, Steel Pipe and Electrical conduit, strut and rod needs at: 1-800-777-7473

Further Reading

Sharpen Your Competitive Edge With United Pipe & Steel

  • Become more competitive and manage your risk on volatile commodity products while turning inventory more quickly.
  • Break bundles and take advantage of low weight minimums while mixing and matching products, including copper tube, PVC pipes, threaded rod, strut and all other products we carry.
  • Buy what you need, when you need it.
  • Take advantage of routine ‘milk run’ delivery routes for service once or twice per week.

Talk With Us! Call: 800-777-7473

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We Deliver On Our Promise

  • Reliable, On-time delivery dates.
  • Knowledgeable service staff pick orders accurately at the warehouse.
  • Reliable delivery made with our own fleet of flatbed trucks.
  • Unique in the Industry - We’ll help you unload at delivery locations including jobsites!
  • As you need, we allow will-calls at all warehouse locations 5 days per week!
  • MTR’s available on all steel pipe.