Section 232 Shoe Ready To Fall???

Soo…. After all the heavy breathing it looks like we are one step closer to the Section 232 shoe falling.

On Feb 16th Commerce Secretary published the findings of his department’s report and issues come recommendations to President Trump:

Secretary Ross has recommended to the President that he consider the following alternative remedies to address the problem of steel imports:

A global tariff of at least 24% on all steel imports from all countries, or

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

A quota on all steel products from all countries equal to 63% of each country’s 2017 exports to the United States.

http://money.cnn.com/2018/02/16/news/economy/steel-aluminum-tariffs-trump/index.html

It was not immediately clear what specific action the President would take but one thing is for sure: He WILL take some form of action. As he has repeatedly stated on the campaign trail AND beyond. If past performance is at all indicative of future results, he will do what he said he was going to do. (Hmmm…. what a concept eh? 🙂 – like his policies or not.)

Then I saw this today:

http://markets.businessinsider.com/commodities/news/us-steel-stock-surges-on-report-trump-will-pick-highest-import-tarrif-2018-2-1017176819

If this report is accurate, it look like he will take a very heavy handed approach which could set off a trade war. It is important to keep in mind that once tariffs are put into place, it is a big hassle to undo them. It also takes some time for them to work their way into and through the markets in order to properly discern what effect they are having and to what degree they are impacting the economy at large.

Anecdotally, we submitted a fair bid on some material just over a week and a half ago (that was very much in line with where we had been up to that point in time) and immediately after the news of the report broke (the very same day that we submitted the bid) we were told that all bids are on hold until further notice and are not being accepted!

Pricing seems to have gone through the roof and something just beneath panic seems to have set in. One point that I think needs to be made is that it is very likely that the anticipated fall out (if you will) from what may be felt from whatever action the President ultimately takes, might already be factored into current pricing and that we might be at the top of the run. (Obviously, this is barring a shortage of steel or some sort of unforeseen crisis.)

The one position that I have stated over and over again here in my blog is that regardless of the Section 232 action, the economy has a few years of dormancy to catch up on AND couple that with the corporate tax cuts and tax reform that has been signed into law and you have very fundamental potential for real growth and an unleashing of a sustained robust economic run.

At this point, I guess the only thing to do is wait and see where things land and not choke up at the wheel in anticipation of what might lie ahead just like these folks:

https://www.ien.com/supply-chain/news/20993159/us-trading-partners-await-decision-on-steel-tariffs?utm_medium=email&utm_source=Industrial%20Technology%20Today%2002202018&utm_term=19536&[email protected]

Keep your ears and eyes peeled of course!

To learn more about Premium Steel Sales, LLC and what we can do for you, check out the rest of our web site at: https://premiumsteelsales.com/