SMU Market Trends: Borders Open for Business

Now that the U.S. borders are open to tariff-free steel from Canada and Mexico, and lower-tariff steel from Turkey, can the market expect a flood of imports in the coming weeks and months? And what will that mean for steel prices?

Last week, the Trump administration removed the 25 percent tariff on steel imports from Canada and Mexico., lifting a major barrier to passage of the new U.S.-Mexico-Canada Trade Agreement. The tariff on Turkish steel was cut in half, from 50 to 25 percent. Despite the Section 232 tariffs, which have been in place for more than a year, hot rolled steel prices have been on a steady decline and are now more than 30 percent below their 2018 peak. At this point, sentiment appears divided between those who feel the market has already factored in the removal of the tariffs and those who expect revived imports from Canada and Mexico to oversupply the market and add further downward pressure to prices.