Russia will respond shortly to the United States' aluminium and steel import tariffs, with plans to establish its own set of duties on US goods, the press office of Russian minister of economic development Maxim Oreshkin confirmed to American Metal Market.
“Due to the fact that the US continues to apply protective measures in the form of additional import duties on steel and aluminium and refuses to provide compensation for Russia’s losses, Russia uses its [World Trade Organization] rights and introduces balancing measures with respect to imports from the United States,” according to Oreshkin.
“These measures, in the form of additional import duties on American goods, will begin to be applied in the near future. They will only bear on products that have analogues in the Russian market and will not have a negative impact on macroeconomic indicators,” he added.
Russia shipped nearly 2.9 million tonnes of steel mill products to the US in 2017, representing 8.3% of the total 34.5 million tonnes of the product brought ashore from global sources.
American Metal Market’s hot-rolled coil index climbed to a nearly 10-year high of $45.52 per hundredweight on Thursday June 14, up 39.5% from $32.63 per cwt at the start of this year, partially due to the tariffs.
For Russia’s aluminium industry, the impact of the tariffs is minimal compared with the sanctions levied on major aluminium producer UC Rusal and the now former director of the company Oleg Deripaska in April, which effectively ceased aluminium shipments from the country.
These actions together helped to boost the US aluminium premium to multiyear highs.
American Metal Market’s Midwest P1020 premium was assessed at 21.75-22.25 cents per lb on June 19, down from the more than three-year peak of 22-23 cents per lb in April but still more than double the 9.4-9.5 cents per lb recorded at the start of this year.
But Russia might be playing a long game, considering that the tariffs could outlast the sanctions after the US indicated it might remove the sanctions versus Rusal if Deripaska divests his shares.
Russia would not be the first country to retaliate against the US tariffs. Other countries - including Canada, the European Union and Mexico - have responded in kind to the US tariffs.
Russia’s warning comes just weeks after the country’s director of trade negotiations, Maxim Medvedkov, floated the idea of WTO action against the US due to the Section 232 tariffs.