Protectionism For The Steel Market

Wednesday 10th May 2017

The Steel Market

Protectionism is doing well in helping the US and European steel market, closing the door to imports. In 2001 the then President George Bush put time and effort into helping steel makers struggling with the economic recession. He soon came to welcome an import tax of 30% for imported steel products in the US. This then had a positive effect on US steel prices. During the recession 1/3 of mills filed for bankruptcy, since the new tax, the price has never fallen that low again.

In 2001 China exported around 5.5 million tons, today they export 20 times that. Steel prices everywhere have rebounded and will possibly keep going. In 2015 US decided to protect its own domestic industry by welcoming in the new import tax. Then last year the European Union decided to follow the US in protecting its own domestic industry’s setting its own new tax laws on steel importation. Their own prices soon soured up to a 77% increase over just 12 months! The sector price earning multiple is now above the decades average by 16 times.

Visit the Financial Times and watch Alan Livsey on the new trade barriers.

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