Impact of US Steel Import Tariffs on Nigeria

As United States President, Donald Trump shows, the first signs of imposing import tariffs on steel imports to the US there maybe a knock-on impact for Nigeria.

This action was sign posted as part of his election manifesto.

However he is now making to first steps on the route to implementation.

All ideas of starting or resuscitating the Nigerian Steel industry should be shelved immediately.

The main losers from the implementation would be the Chinese who have been dumping their excess steel on the US market at sub (or close to) cost price.

Naira Insider readers will be familiar with this concept from our Railway Robbery article.

Without an open US market the Chinese will be looking for other markets for their steel and Nigeria, with its infrastructure development agenda, is an ideal market.

The Chinese also have a track record for providing the loans for their own materials and labour to be used in construction.

This business is almost alchemy.

They lend money to Nigeria only for the principle to be paid back almost immediately through spending the loan on Chinese contractors and materials.

Then they sit back and collect the interest and loan repayments over the next 20 years.

Neo-colonialism at its finest.

So watch out for the FG announcing even more Chinese infrastructure initiatives over the coming year if Trump protectionism takes root.

It was not so long ago (August 2016) that the FG announced a $7bn investment drive in iron ore extraction and steel production.

With current uncertainty in the market, don’t hold your breathe waiting for this to happen.

Also, don’t touch Ajaokuta steel with a very long pole.

 

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