Trump raises tariff on Turkish steel imports to 50pc

US President Donald Trump raised tariffs on imported steel products from Turkey back to 50pc in a sudden move this afternoon in response to Turkey's military incursion into northern Syria.

Trump announced the tariff hike today in a statement on Twitter, and also said that he will soon issue an executive order authorizing sanctions against Turkish officials or anybody "contributing to Turkey's destabilizing actions in northeast Syria."

"I am fully prepared to swiftly destroy Turkey's economy if Turkish leaders continue down this dangerous and destructive path," Trump said.

The imposition of the higher tariffs - double the prior rate of 25pc - was linked to Turkey's military advance into a strip of land in northern Syria controlled by Kurdish and allied forces, in a conflict that has drawn in the regime of Syrian president Bashar al-Assad and his Russian supporters. The Turkish advance came after Trump ordered the roughly 1,000 US forces in the area that had been cooperating with the Kurdish anti-government fighters to pull out.

The Section 232 tariff on steel products from Turkey had been increased from 25pc to 50pc in August 2018 and later reduced back down to 25pc in May 2019.

Turkish exports of steel products into the US through August totaled 201,000t, down by 74pc compared to the 762,000t shipped in the same period of 2018, according to the US Commerce Department.

A minimum of 38,000t of rebar has been sold by at least three Turkish steelmakers to the US since the beginning of September when the arbitrage opened up again on weakening US domestic prices. A Marmara mill is understood to still be in the middle of loading a vessel for October/November shipment to the US, having sold 13,000t so far at $575-585/t cfr US east coast through three separate US importers, including the import tariff, anti-dumping duties and countervailing duties. US importers purchased a maximum of 6,000t each since the beginning of September, according to Argus records.

Some small lots of flat steel products from Turkish re-rollers and traders are understood en route or to be shipped soon to the US as well, which are also likely to be cancelled. A pipemaker is expecting to cancel its orders as well, according to market participants.

Suppliers across Turkey and the CIS will now face additional pricing pressure and some expect possible sanctions from the EU on Turkey as well.

Some European hot-rolled coil (HRC) buyers said that they would not risk purchasing from Turkey now. A large steelmaker expects that in the medium-term, European prices will be adversely affected, although in the shorter term an unwillingness to import from Turkey could lend support to the European market.

source: Argus Media