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Steel Tariffs May Trip Up Another Industry Trump Loves: Coal

Steel Tariffs May Trip Up Another Industry Trump Loves: Coal

(Bloomberg) -- President Donald Trump’s proposed steel tariffs may have a downside for U.S. coal miners.

While tariffs could increase domestic demand for metallurgical coal -- which is used in the steelmaking process -- most of the market for that fuel is abroad. About 75 percent of the coking coal U.S. miners produced in 2017 was sold internationally, with Brazil, Japan and Ukraine being the biggest buyers, according to the National Mining Association. 

That’s prompting the trade group to be cautious about endorsing tariffs. Coking coal, as the steelmaking component is also called, has been one of the industry’s few bright spots in recent years. And anything that dampens demand at home or abroad could hurt U.S. miners.

“We just have to be cautions,” said Luke Popovich, a spokesman for the mining association. “It’s a muddled picture until we know more of the details.”

Of the 785 million tons of coal dug up in the U.S. in 2017, only 7.6 percent of it was metallurgical, according to Andrew Cosgrove of Bloomberg Intelligence. Almost all of the rest is thermal coal that power plants burn to generate electricity.

--With assistance from Tim Loh

To contact the reporter on this story: Joe Ryan in New York at jryan173@bloomberg.net.

To contact the editors responsible for this story: Lynn Doan at ldoan6@bloomberg.net, Will Wade, Margot Habiby

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