Spanish Chamber of Commerce Evaluates the Impact of US Tariffs on Steel Exports
The steel trade between Spain and the United States has encountered significant hurdles following the imposition of a 25% tariff on all steel and aluminum imports by the US government. This new tariff policy is set to have a profound impact on the value of Spanish steel exports, with the Spanish Chamber of Commerce and Industry estimating a reduction of 10.4% in the total value of steel exports to the US. These figures reflect the first comprehensive assessment of the situation and its economic ramifications.
Steel Export Volumes and Values
In the past year, Spanish steel exports to the US amounted to 264.8 thousand metric tons, which represents a slight increase of 0.4% compared to the previous year. According to data released by the US Census Bureau, the total value of these exports stood at approximately $412.2 million. However, this growth in export volume is now at risk due to the imposition of the 25% tariffs, which could lead to a sharp decline in export values. The CCE’s estimates suggest that the additional tariff burden could reduce the overall value of Spanish steel exports to the US market by an average of 10.4%.
Effect of Uniform Tariffs on Spanish Exports
While the new tariffs affect all countries exporting steel and aluminum to the United States, Spain is expected to face a less severe impact compared to some other nations. This is because, according to the CCE, the relative prices of steel and aluminum products from Spain will not undergo significant changes due to the tariffs. As a result, Spain may be somewhat insulated from the full economic blow of the tariffs.
EU-US Steel Trade Agreement
In addition to the blanket tariffs, the European Union and the United States reached an agreement in the fall of 2021 that introduced a tariff quota system (TRQ) for steel trade. This agreement, which is set to expire in March this year, allows for 3.3 million metric tons of steel to be exported duty-free from the EU to the US annually. However, steel exports from the EU that exceed this quota are subject to the 25% tariff, further complicating Spain's steel trade dynamics.
The introduction of the TRQ system had initially provided some relief for the EU steel industry, including Spain, but with the expiration of this system looming, the future of Spanish steel exports to the US market remains uncertain. The combination of the quota system and the tariffs has forced many steel exporters in Spain to carefully strategize their export plans for the coming months.
Long-Term Impact on Spain's Steel Sector
The 25% tariff and the potential expiration of the TRQ system present ongoing challenges for Spain's steel industry, which heavily depends on exports to maintain profitability and growth. If the tariff structure remains in place beyond March, Spanish steel manufacturers may face a prolonged period of reduced competitiveness in the US market.
