Domestic credit rating agency, ICRA in its latest report has said that the US president’s recent move to impose a 25 percent tariff on all steel imports is unlikely to have any significant impact on the domestic steel industry in the medium term. It noted that the tariffs will take effect on March 23, 2018 and would be effective on all countries except Canada and Mexico which together comprises about a quarter of the total US imports.
According to the report, the impact of import tariffs may not be significant in the medium term due to reasons like global steel demand (ex-USA) is expected to increase by 25 MT in calendar year (CY) 2018. It noted that India's steel exports to the USA market remained a meagre 0.7 MT in CY2017, accounting for less than 1 percent of India's domestic demand. Therefore, it pointed out that Indian steel mills should be able to find an alternate market for its nominal US export volumes without much difficulty.
The rating agency further stated that Chinese steel exports has been steadily declining in the last two years, reaching 75 MT in CY2017 from the peak level of 112 MT in CY2015, and in the current year too, exports have continued to shrink, declining by 27.1 percent in the first two months of CY2018. It also noted that this trend is expected to continue throughout CY2018 on the back of a resilient Chinese domestic demand and proposed steel capacity cuts.