U.S. Investigating Possible `Profiteering' on Tariffs, Ross Says
(Bloomberg) -- The U.S. is looking into whether people “illegitimately are profiteering” on aluminum and steel import tariffs after recent outsized gains in prices of the metals, Commerce Secretary Wilbur Ross said.
“There has been a lot of speculative activity, storing inventory, withholding product from the market, by various intermediary parties so the price of steel and for a while the price of aluminum went up far more than is justified by the tariffs,” Ross said in a Senate Finance Committee hearing Wednesday. Price increases are “clearly a result of antisocial behavior by participants in the industry,” he said.
On March 1, President Donald Trump confirmed a 25 percent duty on steel shipments and 10 percent on aluminum. Domestic steel prices are up about 15 percent since then, and are currently the highest in almost a decade. They climbed 10 percent last year and 55 percent in 2016 amid signs of improving global economic growth and U.S. efforts to stem imports of cheaper metal.
The price of benchmark aluminum traded in London is up about 1 percent since Trump announced the tariffs. The metal touched a seven-year high in April after Treasury Department placed sanctions on Russian companies including the world’s second-largest aluminum producer. Prices have since slumped 20 percent from that high, and are down about 4 percent this year.
Tariffs are helping push up the so-called premium, or the amount added on top of the aluminum price to ship metal to the U.S. Midwest region. Brewer MillerCoors said last week that the higher surcharge will boost costs for cans, which could mean a $40 million hit to its bottom line.
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