Biden President, what changes for the steel and metal working industry?
What will happen to the America First motto with the Biden presidency? What implications will this change have for the steel and metals industry? Big questions, which we will try to answer citing some recent sources on the subject.
In an interesting article of the Economic Times, the authors analyzed some two dozen U.S. industries and the expected perspectives as Biden will take over from Trump.
“Industrial metals, such as copper, would be a big beneficiary from additional stimulus and infrastructure spending”. They cite Goldman Sachs, saying that “global spending on green infrastructure will fuel metals demand in the next few years”. During the election campaign, Biden reiterated the firm will to relaunch major infrastructure investments within the country, which should also be a significant incentive in the post-Covid economic recovery phase. The French investment bank Natixis, quoted in an article by Platts, claimed that “the Biden plan is metal intensive and focused on infrastructure and renewables”, and some Biden proposals, including substantial investments in the development of U.S. railways – the so-called 'Second Great Railroad Revolution' – could lead to “a significant boon to steel and copper as a result”.
Many commentators think that Trump's tariffs and trade policies on steel and aluminum will be maintained, at least in the short term. “Producers and consumers have adjusted for the 25% duty on steel imports and the 10% duty on aluminum, and removing them may alienate Midwesterners who helped elect Biden. It’s more likely Biden will keep the tariffs and embrace multilateral trade negotiations with key allies – the EU, Japan, Canada – to oppose subsidized companies in China that produce more than half of the world’s steel and aluminum”, said Bloomberg journalist Joe Deaux.
It is worth remembering, however, that the Presidential choices may be different in the long term. Questioned on the issue by the notorious trade union United Steelworkers months ago, Biden responded that “the Trump Administration’s actions on steel and aluminum have brought some short-term relief, but done nothing to address the long-term challenges facing these sectors. I will review the existing 232 tariffs and any other tariffs that have been put in place”.
Maintaining the tariffs would be the most desirable choice for the American Iron and Steel Institute. In a recent video, Kevin Dempsey, Interim President and CEO, reaffirmed the importance of preserving the U.S. steel tariffs in light of the increasing global overcapacity issues.
The game is open, and Biden's choices on metals are expected to have an impact also on neighboring nations, like Canada and Mexico, and on more distant ones, like China and the European Union, which were also affected by the ax of protectionism.
Photo by Gage Skidmore, Flickr
