Nippon Steel & Sumitomo Metal Corp. is concerned that the recent steel import cuts proposed by the U.S. Department of Commerce may result in oversupply in the Asian markets, Reuters reported Feb. 18.
Executive Vice President Toshiharu Sakae said the actions will be negative for the Japanese steelmaker and will "loosen steel markets, sending supplies back to Asia as there is nowhere else for them to go."
U.S. Secretary of Commerce Wilbur Ross proposed to President Donald Trump a global tariff of at least 24% on all steel imports from all countries, and a tariff of at least 53% on all steel imports from Brazil, China, Costa Rica, Egypt, India, Malaysia, South Korea, Russia, South Africa, Thailand, Turkey and Vietnam, with unlisted countries facing a quota by product equal to 100% of their 2017 steel exports to the U.S., and a quota on steel products from all countries equal to 63% of each individual country's 2017 exports to the U.S.
Trump has until April 11 to make a final decision on the steel recommendations.
JFE Holdings Inc. President Eiji Hayashida previously said that following the policy of "protectionism" is "troublesome" for the global market and other countries may try to hit back following the U.S. action.
China said it reserves the right to retaliate if the "groundless" tariffs are implemented by the U.S. government, Bloomberg News reported Feb. 17.
"If the final decision impacts China's interests, China will certainly take necessary measures to protect its own rights," said Wang Hejun, chief of the trade remedy and investigation bureau at China's Ministry of Commerce.
Nippon Steel's steelmaking and steel fabrication segment posted an ordinary profit of ¥189.7 billion for the third quarter of its fiscal 2017, more than doubling the ¥81.9 billion posted a year earlier.
JFE Holdings recently committed to spending over ¥650 billion over the next three years to upgrade its domestic production facilities to increase productivity and competitiveness, as it looks to meet the auto industry's growing demand for lighter steel and materials to make electric cars.
Meanwhile, Australian Prime Minister Malcolm Turnbull is expected to request Trump to leave his country out of the new steel and aluminum quotas, The Australian Financial Review reported Feb. 18.
Rio Tinto CEO Jean-Sébastien Jacques will travel with Turnbull to the White House to plead the case. The company's smelters in Quebec and British Columbia sell over US$2 billion of aluminum to U.S. manufacturers.