The US has declared a 266 per cent tariff on cheap Chinese cold rolled coil steel. The move is designed to stem the influx of the steel from China and provide relief for US steel producers unable to compete with Chinese state-subsidised prices. The move in the US is in stark contrast to inaction in the UK and EU where tariffs sit below 16 per cent.
The imbalance on the steel markets has seen global steel giant Tata shed 1,000 skilled workers in Port Talbot. A further 1,200 jobs are due to be lost in its Scunthorpe and Scottish plants. Tata reported third-quarter losses of £220m, compared to a small profit in the previous quarter. Tata attributed the losses to the severe drop in global steel prices from $460 a tonne last year to $260 today.
The surplus of Chinese-produced steel derives from a slowing Chinese economy and reducing domestic steel consumption. State-backed steel plants produce an excess above domestic consumption estimated at 360m tonnes each year, which is exported and deflates steel prices.