UAE-based steel producers expect to escape major impact from the latest move by the US to double tariffs on steel imports.
US President Donald Trump has raised import duties on steel and aluminium imports to 50 per cent, from 25 per cent previously, starting on Wednesday, the White House said.
The new tariffs apply to all trading partners except the UK, which struck a preliminary trade agreement with the US last month.
However, steel manufacturers in the UAE don't anticipate a hard hit.
The US decision to double steel import tariffs "may have an indirect effect on market dynamics but is not expected to materially impact Emsteel's business", Michael Rion, chief commercial officer at Emirates Steel, part of Abu Dhabi listed Emsteel Group told The National.
The company has a "modest exposure" to the US market, with exports accounting for less than 2 per cent of total annual sales, he said.
"Given this proportion, the financial and operational impact of the new tariff regime is considered minimal.
"Our current US business model is opportunistic and margin-driven, not volume-dependent."
The company currently exports steel products to 70 markets around the globe.
"Our strategic commercial shift has been toward high-growth regional markets, notably the UAE, wider GCC, India, and North Africa, where demand fundamentals are more robust and aligned with our delivery capabilities."
Meanwhile, UAE-based steel products manufacturer Conares said it is diversifying its export markets across Asia, Africa and Europe.
"With the US potentially becoming less accessible, we foresee increased demand and strategic opportunities within the GCC and Mena regions," said Bharat Bhatia, founder and chief executive of Conares.
The company is also "actively strengthening its domestic footprint to meet infrastructure and construction growth locally", he said.
Conares has large steel plants in Jebel Ali Free Zone with an annual production capacity of 10 million tonnes of steel products including rebars, pipes, and color-coated steel coils, strips and plates.
At present, the US accounts for the third largest export market for steel for Gulf producers, said Matthew Watkins, principal analyst at CRU Group.
"From the GCC side, the US represents about 6 per cent of its total extra-regional export volumes of steel. Although this is a small number it does make the US the GCC’s third-largest export market, behind China and the EU," he said.
"A potential reduction in access to that market would therefore not be painless for GCC producers. But they would probably be able to find alternate markets if necessary."
Trade protectionist policy
The latest move comes as the Trump administration continues with its trade protectionist policy.
“Foreign nations have been flooding the US market with cheap steel and aluminium subsidised by their governments," the White House said on Tuesday.
“President Trump is taking action to end unfair trade practices and the global dumping of steel and aluminium."
The White House said Mr Trump’s tariffs in his first terms as President “strengthened the US economy,” and “led to significant reshoring” in industries like manufacturing and steel production.
Mr Trump implemented tariffs of 25 per cent on steel and 10 per cent on aluminium in 2018, citing national security.
“While the domestic steel industry briefly achieved 80 per cent capacity utilisation in 2021, subsequent trade pressure has depressed domestic production," it said.
In 2022 and 2023, capacity utilisation fell to 77.3 per cent and 75.3 per cent, respectively, with high import volumes being a "major factor in depressing domestic production volumes".
While Mr Trump announced sweeping tariffs across industries and nations two months back, Washington is currently holding talks to reach an agreement on lowering levies.
On May 12, the White House announced that China and the US struck a deal to suspend their tariffs for 90 days. Washington and Beijing lowered their levies to 30 per cent and 10 per cent, respectively from an initial announcement of 145 per cent and 125 per cent in April.
US consumers to pay higher prices
The US will have to continue to import steel to meet its requirements despite the new tariffs introduced by Mr Trump, Mr Watkins said.
"The US is a net importer of steel to meet its demand and despite the escalation in import tariffs that position will not change in 2025," he said.
"Some prior investments in new US capacity are due to start up and some idled capacity can be reactivated, but even with these the US is still going to need to import steel this year."
With the latest tariffs, the cost of importing steel has increased further and this will lead to significantly higher prices for end consumers in the US market, he said.
Mexico and Canada currently dominate steel exports to the US market, with a market share of more than 40 per cent combined. The Gulf currently accounts for 1 per cent of US steel imports.
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Married Malala
Malala Yousafzai is enjoying married life, her father said.
The 24-year-old married Pakistan cricket executive Asser Malik last year in a small ceremony in the UK.
Ziauddin Yousafzai told The National his daughter was ‘very happy’ with her husband.
Sole survivors
- Cecelia Crocker was on board Northwest Airlines Flight 255 in 1987 when it crashed in Detroit, killing 154 people, including her parents and brother. The plane had hit a light pole on take off
- George Lamson Jr, from Minnesota, was on a Galaxy Airlines flight that crashed in Reno in 1985, killing 68 people. His entire seat was launched out of the plane
- Bahia Bakari, then 12, survived when a Yemenia Airways flight crashed near the Comoros in 2009, killing 152. She was found clinging to wreckage after floating in the ocean for 13 hours.
- Jim Polehinke was the co-pilot and sole survivor of a 2006 Comair flight that crashed in Lexington, Kentucky, killing 49.
How will Gen Alpha invest?
Mark Chahwan, co-founder and chief executive of robo-advisory firm Sarwa, forecasts that Generation Alpha (born between 2010 and 2024) will start investing in their teenage years and therefore benefit from compound interest.
“Technology and education should be the main drivers to make this happen, whether it’s investing in a few clicks or their schools/parents stepping up their personal finance education skills,” he adds.
Mr Chahwan says younger generations have a higher capacity to take on risk, but for some their appetite can be more cautious because they are investing for the first time. “Schools still do not teach personal finance and stock market investing, so a lot of the learning journey can feel daunting and intimidating,” he says.
He advises millennials to not always start with an aggressive portfolio even if they can afford to take risks. “We always advise to work your way up to your risk capacity, that way you experience volatility and get used to it. Given the higher risk capacity for the younger generations, stocks are a favourite,” says Mr Chahwan.
Highlighting the role technology has played in encouraging millennials and Gen Z to invest, he says: “They were often excluded, but with lower account minimums ... a customer with $1,000 [Dh3,672] in their account has their money working for them just as hard as the portfolio of a high get-worth individual.”
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US tops drug cost charts
The study of 13 essential drugs showed costs in the United States were about 300 per cent higher than the global average, followed by Germany at 126 per cent and 122 per cent in the UAE.
Thailand, Kenya and Malaysia were rated as nations with the lowest costs, about 90 per cent cheaper.
In the case of insulin, diabetic patients in the US paid five and a half times the global average, while in the UAE the costs are about 50 per cent higher than the median price of branded and generic drugs.
Some of the costliest drugs worldwide include Lipitor for high cholesterol.
The study’s price index placed the US at an exorbitant 2,170 per cent higher for Lipitor than the average global price and the UAE at the eighth spot globally with costs 252 per cent higher.
High blood pressure medication Zestril was also more than 2,680 per cent higher in the US and the UAE price was 187 per cent higher than the global price.
