Trump Elation Deflates for Steelmakers Left Waiting on Tariffs

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(Bloomberg) -- Some of Donald Trump’s most vocal proponents are starting to lose patience.

At the U.S. steel industry’s annual gathering last year, producers could barely contain their excitement at the prospect of Trump cracking down on cheap imports. At this year’s event, a less jovial mood prevailed as they expressed disappointment at the president’s prolonged negotiations to allow exemptions.

In giving steelmakers from Europe to Mexico another month of temporary exemptions on a 25 percent tariff, the government risks spurring another surge in imports, Nucor Corp. Chief Executive Officer John Ferriola said in an interview from the event in Washington this week. Beyond that, it’s exacerbating uncertainty in the supply chain and for major investment decisions.

Two months ago, Trump’s decision to slap taxes on metal imports under the seldom-used section 232 of the trade act pushed up shares in producers such as Nucor, while sparking strong opposition from manufacturers that stand to pay higher prices as a result. But Ferriola said earnings being reported by buyers such as Caterpillar Inc. don’t seem to be showing any 232 damage yet.

“It’s over a year since Trump announced the 232 investigations and here we are still talking about implementing it,” Ferriola said. “Extending it extends the period of uncertainty for our customers.”

White House trade adviser Peter Navarro made an appearance at the event a day after the extension to clarify the decision-making to the industry.

In an “all-hands-on-deck” meeting, officials reached agreements in principle with Australia, Brazil and Argentina, while extending exemptions for Canada and Mexico to let Nafta discussions play out, Navarro said.

Quotas are non negotiable for nations exempted from tariffs, he said, assuring that Trump is “focused like a laser beam” on trade. Without a quota, nations could circumvent or transship steel through exempted nations that could eventually end up in the U.S.

The remarks didn’t satisfy some industry members at a closing cocktail reception that night, who said so much was still up in the air, with consumers set to continue importing as much as possible before the tariffs hit.

Ferriola predicted that implementing measures retroactively would cause further confusion for customs agents and customers who had already obtained imported material.

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