Faisal Abbas 
A worker counting steel coils in a mining factor in China, June 13, 2024 (Getty)
The customs duties imposed by US President Donald Trump by 25% warn of his country’s imports of steel and aluminum, which came into effect from yesterday, Wednesday, with a “global solid war”, as the major producing countries will have to direct their surplus to alternative markets, creating problems related to competition and confusing the markets.
For example, South Korea and Vietnam impose steel fees, while the European Union stresses protection measures, and factories in Latin America are seeking more support. Often the aim of these moves is China, the dominant product whose exports increased last year to almost record levels. The risk facing steel companies around the world is that Trump’s fees may exacerbate the excess supply, which increases the pressure on producers and governments at a time when the market is already suffering from the demand for metal.
“If restrictions are placed in front of the entry of the American market, part of this steel will go to at least other markets in the short term, and you will search more factories for alternative markets,” Thomas Guterres, an analyst at the Consulting Consulting Company, told the American Bloomberg Agency.
The metal is the cornerstone of the global economy, as most major countries aspire to have a solid industry, while its rooted political relations have left the field open to waves of protectionism since the nineteenth century. With regard to Trump and others, the metal still represents a symbol of industrial power to this day.
The new fees imposed by Trump enhances the commercial measures he took in his first term (2017-2021), as it cancels exemptions granted to many countries, and expanding their scope to include new categories of products. The result that steel producers fear is to redirect excess excess from China and other countries to markets that already have pressure.
This specifically worries the steel makers in Europe. During the first presidential period of Trump, for every three tons that did not reach the United States, two tets ended in Europe, according to the “Eurofer” organization, which represents steel producers in the European Union.
“The 18 million tons, which the United States imports today, with exemptions, will have to find an alternative market … they are looking for an open market represented in the European Union.”
A basic aspect of Trump’s justifications for the imposition of customs duties on China is based on that he believes that the Chinese steel drowns global markets, pushing other countries to export more to the United States. He referred to Brazil, Mexico and Argentina as parties to contributing to this phenomenon. He also blamed other countries for not taking sufficient measures to address the inflation of the Chinese steel sector.
This sector controls most of the global markets, as it has expanded a lot during the first two decades of this century to support urban development and enhance the industrial strength of China. However, in the past five years, the demand decreased partly as a result of the pandemic and the real estate crisis in the country, but the annual production remained constant above a billion tons, which led to an increase in exports. This height has already sparked a wave of reactions from trade partners who are now afraid to promote protection more.
Vietnam and South Korea, the largest Chinese steel importers and senior exporters as well, imposed fees on hot steel coils, a commonly used product that constitutes a large part of global trade flows. Taiwan also launched an investigation to combat dumping, while the Commercial Authority of India recommended that extensive fees be imposed on steel imports, according to a local report.
“Steel producers in Thailand will face more difficult challenges … we are already tiger in a difficult period due to the flow of Chinese steel products, even as the government takes some anti -dumping measures to protect local producers,” said Petroj Maysinsey, head of the cold -made metal and steel pipeline association in Thailand. He added: “There is another concern that the definitions imposed on steel products from other countries may push these countries, not China alone, to discharge their products in the Thai market. We have already noticed a clear increase in steel products coming from Vietnam.”
At the same time, the European Union reviews its controls on imports after increasing infringements from unusual destinations, in conjunction with the decline in demand in Europe. According to the “Shanghai Minerals Market”, a Chinese research authority, the total size of the Chinese steel affected by the anti -dumping issues reached more than 30 million tons by the end of last February, which is more than a quarter of Chinese exports last year.
Meanwhile, China announced yesterday, Wednesday, that it will take “all necessary measures” to protect its interests in response to US customs duties on steel and aluminum imports. “China has always seen protectionism does not provide a way out and that any party will not come out victorious in commercial wars and customs duties,” Chinese Foreign Ministry spokesman Mao Ning said when asked about the drawings at a daily press conference.
She added that “the United States’ procedures are seriously violating the rules of the World Trade Organization and seriously harm the multilateral trade system based on the bases and do not lead to solving the problem.” “China will also take all the necessary measures to protect its legitimate rights and interests,” she added.
