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Execs have tariff doubts, see Trump win: survey

Mar 03, 2020 | 09:12 AM | New York | Elizabeth Ramanand


Corporate leaders in the North American steel and metals industry have high expectations for a presidential win for Donald Trump in the 2020 election, but they expressed more uncertainty on tariffs and trade with China, an annual survey by corporate finance and strategic advisory firm Headwall Partners shows.

According to the survey, 86% of respondents believe the Trump administration policies will have a positive impact on 2020 gross domestic product (GDP) and 73% believe the economic policies of the Trump administration had a positive impact on recent US GDP growth.

“This year’s growth survey draws some very interesting conclusions from senior sector executives, including a near consensus on the benefits of past and expected future Trump administration economic policies and the near unanimous expectation that Trump will win re-election,” Peter J. Scott, founder and managing partner of Headwall Partners, said in a statement.

The near unanimous expectation referred to the 91% of respondents who believe Trump will win the 2020 presidential election.

When asked about the long-term impact that certain candidates would have on corporate financial performance over the next four years versus a second term of Trump, 77% of executives surveyed said Joe Biden would have a moderate negative impact and 73% indicated that Bernie Sanders and Elizabeth Warren would have a strong negative impact.

Steel executives were more uncertain about the impact of Section 232 tariffs and the US trade relationship with China.

Asked if the US will reach a comprehensive trade deal with China, the results were split with 59% of those surveyed saying yes and 41% no.

“Also quite interesting is the lack of consensus on the impact of [Section] 232 trade restrictions, with a very broad range of financial implications experienced from [Section] 232 across the sector,” Scott said.

According to the survey 37% of respondents believed the Section 232 tariffs helped the financial performance of their company, 41% said that such performance was harmed and the remainder saw no impact.

“I don’t hear much talk of Section 232 going just away even with the election, I don’t really see that as any priority. It might be around this year and next year and longer than that for new capacity,” one steel trader source told Fastmarkets. “[Section 232] could well go in time as people realize the high cost of steel and the effect on the rest of the industry.”

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $30.08 per hundredweight ($601.60 per short ton) on Monday March 3, down by 29.7% from $42.78 per cwt on March 23, 2018, when the Section 232 tariffs went into effect and a 34.4% decline from the nearly 10-year high of $45.84 per cwt reached in early July 2018.