U.S. hits back Turkey, Doubles Tariffs on Steel Imports

As per the latest updates, the Trump government has once again raised tariffs on steel imports from Turkey to 50% in response to Turkey's military incursion in northern Syria.
The Section 232 tariff on steel products from Turkey had been increased from 25% to 50% in August 2018 and later reduced back down to 25% in May 2019.

However, now with the increased tariffs, suppliers across Turkey and the CIS will face additional pricing pressure and some expect possible sanctions from the EU on Turkey as well. While few trade participants are of the opinion that they would not risk purchasing from Turkey now, a large steelmaker expects that although in the shorter term an unwillingness to import from Turkey could lend support to the European market, in the medium-term, European steel prices will be adversely affected.

According to U.S. Commerce Department, Turkish exports of steel products into the U.S. from Jan-Aug'19 totalled to 201,000 tonnes, down by 74% compared to the 762,000 tonnes shipped in the same period of 2018.

Turkey's steel sector has already come under pressure from a global economic slowdown which has taken toll on its construction, automotive and white goods sectors, driving down steel consumption by 31% y-o-y basis and production by more than 10%.

Apart from U.S., Turkey's another key steel buyer, European Union has also set quotas for 26 grades of steel in the month of February this year, at the average level of imports in 2015-2017 plus 5%, with further 5% hikes due in July and in July 2020. Imports of steel beyond these quotas are subject to a 25% duty. But the European Commission later cut this year's quota increase to 3% from 5%, effective from 1 Oct'19. It also limited any one country to a 30% share of imports of hot-rolled flat steel per quarter further leading to a contraction in Turkey's flat steel and rebar exports.

Turkey's key Steel Products Exports during Jan-Aug'19