Response to US Steel and Aluminum Import Tariff Effect

Response to US Steel and Aluminum Import Tariff Effect on Saudi Arabia
An interesting aspect has been raised about the effect of tariff on a country like Saudi Arabia
which currently is not a major producer. However, on account of the lower protection laws,
the domestic steel and pipe manufacturing industry is vulnerable. The concern is especially
relevant in the context of slowing economic growth globally. Of particular worry is the
escalation of trade war between US and China and the impact that it is expected to have on
the Chinese economy. This would lead to lowering of demand in steel which would then be
dumped to other countries particularly in the GCC region (NSCI, 2019).
The domestic steel industry is unlikely to be able to compete with cheaper imports from
China and other major producers. This will have far reaching implications for the Saudi
Kingdom at a time when the oil prices are low and also there is unrest in Saudi Arabia with
regards to high unemployment. The steel and aluminium producers which had the highest
exposure to US market would be the most hit. This would also hamper the 2030 vision
whereby Saudi Arabia aims to emerge as a export hub with reduced reliance on oil as a
source of revenue. Considering the worsening global growth and trade war fears, it is
imperative that Saudi Arabia must erect suitable protection measures to ensure that the import
of steel and aluminium from various nations is limited only (Braunstein & McPheron-Smith,
2019).
References
National Committee for Steel Industry. (2019). Retrieved 28 September 2019, from
https://www.ncsi.org.sa/press-release/will-saudi-arabia-be-affected-by-trumps-steel-
and-aluminum-import-tariff/
Braunstein, J. & McPheron-Smith, O (2019), Retrieved 28 September 2019, from
https://www.globalpolicyjournal.com/blog/12/02/2019/us-china-trade-war-and-its-
implications-saudi-arabia