Maybe you should be…

So, the tariffs we discussed back in March? Many were “delayed” by the Trump administration as they tried to negotiate with Mexico, Canada, and the EU. The administration set their own deadline for those negotiations of 6/1/18. The only agreement reached was with South Korea, who agreed to quotas rather than a tariff.

As it became clear there would be no agreements before the 6/1 deadline, the administration re-invoked all tariffs of 25% on all steel against every party including Mexico and Canada. Keep in mind, only South Korea exports more carbon and alloy plate to the US than Canada does, and they already agreed to quotas.

So, again, should you be worried? Maybe. There will be definite short-term upward pressure on pricing. However, no one is sure how long the tariffs will remain in place. This administration has a habit of taking a strong stance up-front, and then walking things back. But, relationships are rather acrimonious right now, so it is too difficult to predict what will happen next..

There will also be pressure on supply as the largest domestic plate mill just won a large line pipe contract. Interestingly, most companies in the warehousing business like DVS, are not taking a “position” by purchasing large quantities of new plate. Many smaller companies find the financing restrictive as prices escalate. Others, like us, are afraid of a pricing collapse and don’t want to be stuck with higher priced material we can’t sell later this year.

So, what should you do? Be cautious. Make sure your quotes include a clause that allows you to change pricing if needed. Try to give your suppliers as much head’s up as possible for larger purchases, so inventory can be secured at the lowest possible number. Communicate with us so we can help you run your business as profitably as possible.

Supply is not yet tight, and our inventory remains bountiful. Lead times, however, are extending to September. We remain committed to helping you navigate these uncharted waters. Please feel free to contact us to learn more information.