March 2, 2018 / 3:10 PM / 3 months ago

Turkish steelmaker considers U.S. expansion after tariff increase

ISTANBUL (Reuters) - Leading Turkish steelmaker Borusan Holding is considering expanding its plant in the United States after U.S. President Donald Trump proposed a hefty increase to tariffs on imports, the company’s chief executive said on Friday.

Trump said the planned duties of 25 percent on steel imports and 10 percent on aluminum were designed to protect U.S. producers and safeguard American jobs. They also risk retaliation from major trade partners such as China, Europe and neighboring Canada.

But in Turkey — the sixth-largest exporter of steel to the United States, accounting for 5.6 percent of American steel imports — the immediate reaction was relatively sanguine, with Borusan saying it could ramp up its U.S. business, while an industry association said Turkey would remain competitive thanks to lower costs.

Overall, Turkey is the world’s eighth-largest steel producer.

“The U.S. tariff decision on steel imports is important for Borusan ... We are considering expanding our production facility there, depending on the details of the U.S. tariffs,” said Borusan Holding CEO Agah Ugur.

He said that uncertainty over steel pricing could interrupt exports but it was unlikely to have a negative effect overall.

Borusan, an industrial group with businesses spanning steel, energy and logistics, has a plant in Houston, Texas, that produces steel pipes.

The Turkish Steel Exporters’ Association (TSEA), meanwhile, said that the country’s lower cost base would help its steel exports remain competitive even after the tarrifs.

U.S. steel costs about $850 a ton, against $600 a ton for Turkish steel imports, TSEA Chairman Namik Ekinci said. A 25 percent tariff on Turkish steel would lift the cost to $750 a ton.

“We match the prices of U.S. producers even with the additional tariff,” Ekinci said. “So there seems to be no disadvantage.”

Additional reporting by Ezgi Erkoyun; Writing by David Dolan; Editing by David Goodman

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