“Trade wars are good and easy to win,” chirped Donald Trump during his latest attention-grabbing “coup”. Announcing high import duties on steel (25%) and aluminium (10%), the US president cast caution to the wind, as usual, and ignored all the warnings put forward by economic experts. In his childhood, the US steel industry was big and powerful, and that's how he thinks it should be again now, at his age. End of story.

However, steel is used not only for car production (with a declining tendency), which would also become significantly more expensive for the US consumer. Infrastructure projects – for example, walls are often reinforced with steel mesh – and plant engineering are particularly dependent on steel construction.

The American Chemistry Council (ACC) believes investment in the petrochemical industry is now at risk. We are talking here about a hefty sum of over USD 185 bn, most of it for cracker facilities and plastics production that aim to keep the world happy. To build the plants, the US is dependent on imported steel and if that becomes more expensive, the many tightly calculated mega-projects from numerous big corporations will come to nothing, says the ACC.

The council – not exactly known for any un-American activities in the past – is therefore calling on the president to rethink the matter of import taxes. “An increase in both tariff and trade barriers is not the solution,” it says in no uncertain terms.

There's not much to add to that.

Daniel Stricker
PIE Head of Market Research