Trump steel tariffs have no impact yet on steel cargo coming into New London

New London — A 25 percent tariff on steel imposed by the Trump administration has not resulted in a drop in the volume of steel cargo coming into the city's deepwater port.

Steel coils and steel beams imported from Europe, mainly Belgium and Germany, continue to be brought in regularly at State Pier, according to Logistec, which runs the state-owned facility.

There was an influx of steel bar from Turkey, a relatively new cargo at the port, in anticipation of the tariffs. Some still is being stored at State Pier, awaiting pickup by truck. President Donald Trump recently mentioned further increasing the tariff on imports from Turkey.

Related story: State Pier could become hub for smaller cargo ships, says federal maritime head

The Trump administration in late March suspended tariffs on steel and aluminum imports from certain countries, including members of the European Union. A month later, it announced it would be restoring the tariffs for steel and aluminum imports from Mexico, Canada and the European Union, effective June 1.

State Pier averages about two shipments of steel per month. The steel is transported by truck to receivers mainly throughout the Northeast, and also the Midwest.

The customers are paying the tariff on steel being imported from Europe, as U.S. steel producers have taken advantage of the situation and raised their prices, so there's still demand for foreign steel, according to Frank Vannelli, senior vice president of commercial and business development for Logistec.

The net effect is higher cost of materials for construction, he said. Rebar — long, spaghetti-like strands of steel — is used to help reinforce roads and industrial buildings. Steel coils and beams are used in cars and in the paneling on stoves and refrigerators, for example.

The only concern Vannelli has heard "in the marketplace" is over the Trump administration's desire to impose quotas on foreign steel in order to increase the purchase of American steel.

"Some of the steel manufacturers that are still paying the duties on the steel coming in from overseas, if they get a quota tapped on them, then there's an issue," Vannelli said. "Once you hit that number, you're essentially boxed out."

So-called foreign trade zones have been talked about as a way to get around the tariffs. There are hundreds of these trade zones around the U.S., but they don't count as being in the U.S. for customs purposes. Within one of these zones, companies receive tariff relief. Companies can bring parts into a zone and build the product, and pay taxes on the final product.

New London's foreign trade zone is inactive, but there have been talks of reactivating it. Logistec would like to pursue those discussions once the search for an operator for State Pier is complete. The Connecticut Port Authority, which owns State Pier, has issued a request for proposals for an operator. Proposals are due at the end of the month, with the selection of a firm expected in mid-September.

Gov. Dannel P. Malloy announced in May a $15 million state investment to expand and improve the facility.

j.bergman@theday.com

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