The US-China trade war has destructed the global economy. Both the US and China experience a drop in the export and import of metal scraps. So the domestic demand for scraps has increased which in turn has created an upsurge in the metal price.
US-China trade war:
The President, Mr. Trump of The United States of America, has imposed the metal tariff in 2018 that has spoiled the global commerce. Mr. Trump pointed out that The US has been losing its fortune on trade for over several years now, and this can be corrected only by imposing a tariff. Initially, he charged 25% tariff on Steel and 10% on Aluminum. He aimed the US companies to reduce the import by using domestic products and to enhance the export. He charged duties on steel and aluminum from the countries, including Canada, Mexico and the European Union, who in turn responded by imposing a tariff on US goods. Mr. Trump charged duties on over $250 Billion worth of goods from China too!.
The Motive behind Imposing Tariff:
The main reason for the US implementing the tariff was to use the metal products within the country than importing from other countries and to sort the trade deficit of $ 350 billion faced by the USA with China. The US imported $ 500 billion from China and exported only $ 130 billion to China. In order to enhance the production within the country and to reduce the import rate, Mr. Trump decided to impose the tariff on the metal products.
Trade Crack between the US and China:
China is considered to be the Super Power in the field of Trading. Chinese had been the largest consumer of metal scraps for long years. After the tariff charged by the US, China counterattacked by imposing the tariff of 15-25% on US products. This created a crack between the US and China Trade which leads to a Trade fight between the two biggest economies. China applied tariff of US$110 billion worth US products.
Michigan the major exporter of Scrap metals:
Michigan is known as the heart of The American Automotive Industry. The byproduct in the form of scrap produced from the Industry is recycled into appliances, building material and other products. Michigan was the larger exporter of Scrap materials.
Tariff added benefits to Domestic Metal Processor:
This tariff imposed would be a fortune for the metal processors of USA, as more domestic companies would approach them. This would gradually improve on the production as well as demand. The tariff imposed is a huge win for the domestic recyclers and producers said the Chairman of Aluminum Recyclers Council(ARC). The US producers who have manufacturing plant got benefited. They are charging higher prices and some have reopened closed sites.
Tariff affected the Global Exporters:
The tariff affected the major global exporters of metal into the US, as the manufactures of US do not demand their material. This situation has led the affected countries to take counteraction by imposing a tariff on US products which again created controversies in international trade. And also they were forced to look at other countries to make their trade.
Domestic demand would raise the metal price:
The demand for the metal scraps would directly affect the metal price. This will lead to the situation of raising the cost of the product. The tariff is set to affect both the US and China as the demand for the product for which the tariff imposed is Unavoidable. The affected countries are looking up for other countries to continue trade with their metal scraps. Some of the Asian countries are getting benefited as the affected countries are approaching them.
About Anandhi Anthiran
Hi, I’m Anandhi Anthiran born at Kanyakumari, India. We are five members in our family. I have two
younger sisters. About my schooling, I took my elementary education at Chennai. When I was 10 years
old, our family got permanently shifted to Kanyakumari as it is our native land. Kanyakumari, the .... more info