US Tariff on Canada Impacts Indonesian Steel Exports
Krakatau Posco Plant in Cilegon, Banten - Photo by Krakatau Steel

JAKARTA (TheInsiderStories) — The United States import tariff on steel products has indirectly impact Indonesia. Two Indonesian steel product groups, heavy plate and stainless steel wire exports to Canada are limited by the country’s safeguard, senior officer said on Thursday (04/11).

Foreign Trade Director General of Indonesia Trade Ministry Oke Nurwan said, only five of seven steel product groups access freed from the Canada’s safeguard. The products are concrete reinforcing bar, energy tubular goods, hot rolled sheet, pre-painted steel, and wire rod. According to Canadian authority investigation on April 3, those products cover around 70 HS codes.

“The results of the investigation revealed that the five steel product groups were not proven to cause serious losses to the Canadian industry due to a surge in imports. Meanwhile, the other two product groups are subject to safeguards actions,” said Nurwan in official statement.

With the slashing steel goods groups, Nurwan claimed that the safeguard-free products can increase Indonesian export volume and expand market access to Canada. While recently, Indonesia has been actively exporting concrete reinforcing bar and energy tubular goods valued US$14 million and $5.6 million last year.

Meanwhile, Trade Security Director of Indonesia Trade Ministry Pradnyawati expects that Indonesia could get special treatment over its status as an emerging country based on the World Trade Organization agreement. She hopes that Indonesian two remaining steel product groups can be disposed from the safeguard. Especially, Indonesia’s export to Canada only holds 3 percent of its total market.

However, she expected that Indonesian exporters can take advantage of safeguard release provisions for the five steel products and continue to increase its exports to Canada.

Canada’s investigation over its steel imports started in October 25, 2018, triggered by US global restriction. US President Donald Trump imposed 25 percent tariff on the country’s steel import and 10 percent on aluminium import, starting in March last year. So as an effort to minimize import diversion from the US, Canada enforced probe on the impact of Trump’s action.

With Trump’s policy, Canada was pessimistic about the possibility of a rate increase being immediately removed. This is because, Canada as the sole supplier of aluminum and steel to the US, it is feared to be a metal dealer agent for other countries claiming that the metal was produced in Canada to enter the US market.

Previously, in the US-Mexico-Canada agreement, noted that US officials had asked Canada to issue similar rules for the import of aluminum and steel. But, the Canada government refused to maintain export growth.

Indonesia still has more worries. European Union and Turkey also do the same limitation following US tariff impose on the steel import.

Written by Staff Editor, Email: theinsiderstories@gmail.com

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