The Slovenia Times

Slovenian producers concerned about US import tariffs

Business
A steel furnace. Photo: Tamino Petelinšek/STA

Slovenian steel and aluminium producers are concerned about the US's plan to impose a 25% tax on steel and aluminium imports next month, including on imports from the EU. The move is expected to further increase competitive pressure.

Slovenian companies exported just over €91 million of steel products and €32.5 million worth of aluminium and aluminium products to the US in 2024, according to preliminary data from the Statistical Office.

The industry thus accounted for 11% of Slovenia's total exports to the US.

Steel and aluminium exports were up considerably from 2023, when exports of steel products reached €71.6 million and those of aluminium and aluminium products €19.5 million.

SIJ generates about 10% of sales in US

Slovenian Steel Group (SIJ) sees the US as an important market with long-term potential. Last year it generated about 10% of its sales revenue there or about 17% more than the year before.

"We have been present in the US for more than 30 years with our own company SIJ Americas, and in 2022 we established our own warehouse of more than 3,000 square metres near Chicago in Romeoville to bring our products even closer to our customers and to gain an even larger share of the US market," the company told the Slovenian Press Agency.

Slovenia currently has a quarterly import quota for exports of stainless steel plate to the US which is exempt from customs duties. Quantities in excess of that quota are subject to a 25% import duty on steel.

For tool steels, there are also exemptions for products of certain qualities and dimensions not produced in the US or produced in limited quantities, but if no exemption is granted for a particular type of steel, these imports are also subject to a 25% duty.

SIJ says that it is not yet clear whether this system will remain in place, but "the suspension of quotas and exemptions, and any further increase in import duties would affect our price competitiveness in relation to US steel producers".

Impol and Talum less exposed

Another Slovenian exporter, aluminium processing company Impol already reduced its exports to the US in 2020 in response to anti-dumping measures during Donald Trump's first term.

The group's sales in the US accounted for 10% of its total sales in 2019, but dropped to 4.5% in 2020. Due to further pressures and uncertainties, the volume of its sales to the US dropped further to below 3% of Impol's total sales in 2024.

"Additional tariffs in the US do not bode well in the context of an unfavourable market situation in Europe, as we will face even greater competitive pressures in an already challenging environment and further limited market opportunities," Impol said.

The group is thus trying to diversify, both in terms of geographic markets and by product and industry, to optimally manage market fluctuations and ensure business stability.

Even less dependent on the US market is aluminium products maker Talum. Last year, it sold less than 0.5% of its output there and does not expect to be directly affected by the tariffs.

"At this point, we can only be guessing about indirect effects. However, any measure that may lead to trade wars cannot have a positive impact on anyone," Talum said.

The company is concerned about the impact on the EU materials industry, which is already faced with a decline in competitiveness due to incomparable business conditions in other parts of the world.

Tariffs to undermine competitive edge

Bojan Ivanc, chief analyst at the Slovenian Chamber of Commerce and Industry, agrees that many things remain unclear about the tariffs, but if they are indeed imposed, he says they will make Slovenian exporters less competitive.

The tariffs would lead to higher prices of these products in the US in the short term, because the US could not increase its production capacity so fast.

Should they be in place for a long period, the US could increase its output, while end products would at the same time be more expensive for end users, he explains.

Pressure on prices of steel and aluminium in Europe would also increase, as certain large producers in Asia, for instance in China, would likely seek new markets where they could be more competitive. A rise in supply of these goods from China could spell trouble for European companies, he warns.

Share:

More from Business