China fires back against US steel, aluminum tariffs with WTO complaint

Dive Brief:

China has filed a complaint with the World Trade Organization (WTO) over President Donald Trump's steel and aluminum tariffs, according to the Associated Press.
As part of its challenge, the Chinese government is arguing that the 25% tariff on steel and the 10% tariff on aluminum violate international trade laws. China reportedly churns out steel and aluminum in quantities that outstrip demand, leading some of the country's trade partners to accused it of dumping its stock at prices low enough to harm their economies. The U.S. imports a relatively small amount of steel and aluminum from China, but the WTO complaint is seen by some economists as a way for China to assert itself in what looks to be an escalating trade war with this country.
If the U.S. and China can't resolve the dispute on their own within 60 days, a panel of trade experts could be called upon to issue a ruling in the matter.

Dive Insight:

As China and the U.S. go toe-to-toe over steel and aluminum tariffs and other trade discrepancies, some U.S. construction stakeholders have already reported seeing as much as a resulting 10% uptick in material prices.

And while U.S. steel companies will benefit from the new duties, small domestic manufacturers already say the tariffs are harming their businesses. Since the extra charge falls on raw steel, small businesses that source their materials from abroad in order to produce rebar and other products are paying higher prices, which they then pass on to their customers. In an unexpected twist, some metal fabricators have reported losing customers to businesses based in other countries that don't impose such hefty tariffs.

According to Archinect, the biggest tariff-related impact will be felt in the structural steel industry, but it will be minimal. Raw material makes up about 30% of the cost per ton of structural steel used for steel-framed buildings and should add, in most instances, less than1% to the total cost of construction.

But U.S. steel production, according to Archinect, could have trouble keeping pace with demand as they ramp up capacity. In addition, contractors and subcontractors will face uncertainty as they price out material for upcoming work. Many will increase the amount of their bids to compensate for the likelihood of price fluctuations, but that issue should not be a long-term one.