The following is text of a news release from BIMCO:
(LONDON) — Months of uncertainty about the potential exemptions of the European Union (EU), Canada and Mexico’s exports of steel and aluminum to the United States have ended, and with a hard hit. The U.S. has chosen not to extend the exemption, which has triggered immediate retaliatory measures from Canada and Mexico. The EU will reveal its “rebalancing” measures against U.S. on June 20.
“The U.S. (is) now firing shots against long-term allies in something which could soon become a full-blown trade war," said BIMCO’s chief shipping analyst Peter Sand. "Not only is this affecting the seaborne shipment of steel and aluminum, but the retaliation from EU will also affect the trans-Atlantic container trade."
BIMCO recently reported that the U.S. imported 32 million tonnes of the specific tariffed aluminum and steel commodities via the sea in 2017. The EU, Canada and Mexico were responsible for exporting 8 million tonnes, equivalent to 160 Handymax loads (50,000 dwt).
Germany is the main European steel and aluminum exporter to the U.S. of the tariffed commodities. However, Mexico and Canada are larger when including exports via other transport measures than seaborne.
Mexico exported more than 1.3 million tonnes of the tariffed steel and aluminum via the sea in 2017 and an additional 2 million tonnes by other transport measures. Canada, being the biggest exporter of steel and aluminum to U.S., exported close to 1.2 million tonnes of the tariffed steel and aluminum via the sea in 2017 and an additional 7.5 million tonnes by other transport measures.
The canceled exemption of the EU, Canada and Mexico comes amid the looming trade war between U.S. and China, which already has caused a lot of disorder, especially for the soybean trade which is the most significant “one commodity” to be affected.
“From a wider perspective, the effect of an escalating trade war may derail the current global upswing, which is at its highest point since 2011 and expected to continue," Sand said. "This will have cascading effects on shipping demand as a whole. Free trade provides prosperity and is a fundamental principle to cherish and safeguard."
