US aluminum and steel producing industries were among the top 10 businesses impacted by higher prices due to retaliatory tariffs during the China-US trade war of 2018, according to a US Federal Reserve study.

 

The study revealed that tariffs levied by the US and the retaliatory tariffs from China and other countries during this period impacted the cost of domestic production for these metals.

 

According to the report, the cumulative effect of all new tariffs from January through September 2018 affected 7.7pc of aluminum exports, 6.9pc of iron and steel mills and ferroalloy manufacturing exports, and 4.9pc of automotive manufacturing exports.

 

The report suggested that the aluminum industry’s sheet, plate, foil & rolling, drawing, and extruding business was most affected by increased costs from recent import tariffs as its manufacturing costs increased by 17.6pc because of these tariffs. 

 

Other metals that saw their costs rise due to the new tariffs regime included steel product manufacturing from purchased steel (8.4pc); boiler, tank, and shipping container (8.3pc); forging and stamping (7.4pc); secondary smelting and alloying of aluminum (7.1pc); architectural and structural metals (5.3pc); other transportation equipment (5pc); and other general purpose machinery (4.5pc).

 

In 2018, the US initiated an investigation under Sec 232 of the Trade Expansion Act that impacted steel and aluminum imports. The announced tariff rates were applied at 25pc on steel and certain steel products; and 10pc on aluminum imports. 

 

Though the administration initially exempted imports from several countries — including Canada, Mexico, Korea, and the countries comprising the European Union — these exemptions were removed in June 2018. Around $42bn worth of steel and aluminum imports to the US were affected by these changes.

 

China and the other countries that were subject to Sec 232 tariffs, in turn, imposed retaliatory tariffs on exports from the US. For China, these tariffs focused on aluminum scrap, mixed grade scrap, pork and various agricultural products.

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