The Daily Update - Steel and guns

In breaking news yesterday, ‘Dick’s for guns’ that is Dick’s Sporting Goods Inc., the largest sporting-goods retailer in the US is ending sales of assault-style rifles as well as ending sales to the under 21’s and will no longer sell high-capacity magazines, better late than never.

Sticking with the US, President Trump looks set to announce tariffs of up to 25% on steel imports and 10% on aluminium imports from all countries later today. The tariffs will be imposed under section 232 of the Trade Expansion Act of 1962.

The act which has hardly ever been used allows tariffs on the shipments of the metals as a matter of US national security. The law does not define ‘national security’ but is being used in the context that a weakened steel industry would be less able to build weapons such as tanks should a military crisis take place, bit of a stretch but that is the law. The last time steel was considered under the act was in 2001 when the commerce department looked at iron-ore and semi-finished steel and concluded imports didn’t threaten national security, but they didn’t have Mr Trump to answer to then.

Of course, any actions are likely to be countered by China, the world’s biggest steel and aluminium producer, with rumours that they are already looking towards US soybean imports. Of course, that would cause Trump some political concerns in certain US farming states with the midterm elections approaching in November.

However, Chinese steel exports to the US have fallen 72% since 2014, with China only the 11th biggest steel exporter to the US in 2016, while imports from Vietnam have risen six fold over the same period and a third of all US steel imports are currently coming from Canada and Brazil, so the implications of tariffs maybe felt a lot closer to home than in China.

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