Trump’s Already Spooking Buyers of Foreign Steel, Cliffs Says – by Joe Deaux (Bloomberg News – July 27, 2017)

President Donald Trump’s pledge to safeguard U.S. steelmakers from cheap overseas shipments is already working even as hopes fade of an imminent announcement of measures.

At least that’s what Cliffs Natural Resources Inc. Chief Executive Officer Lourenco Goncalves says is happening as buyers shy away from imported steel in case the White House hands down restrictions that would invoke retroactive penalties. The ensuing increase in demand for domestic metal is allowing U.S. producers to push up prices, he said in a telephone interview.

“We are seeing that happening right now,” said Goncalves, whose company sells iron ore to U.S. mills. “Right now there’s a lot of people who are scared.”

Commerce Secretary Wilbur Ross has flagged possible tariffs, quotas or both to limit imports on grounds of national security under the seldom-used Section 232 of the Trade Expansion Act.

While potential curbs on both steel and aluminum have pushed up producers’ shares in the U.S., they have also drawn warnings from top economists including Former Federal Reserve chairman Ben Bernanke as well as buyers of metal products from Caterpillar Inc. to Coca-Cola Co. that a crackdown on imports could push up costs and squeeze margins.

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