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The concept of imposing a 25 percent tariff on steel imports into the United States appears to be a good way to protect the local steel industry. Unfortunately, this action has generated unintended consequences for consumers. Domestic steel prices have increased significantly, since the start of the year. US steel producers are taking advantage of the reduced import threat by increasing their selling values to consumers and service centres. Local manufacturers in steel intensive industries have, already, seen their input costs rise significantly.
MEPS calculates that the cost of steel supplied to autobody parts makers, in North America, increased by 22 percent during the first five months of the year. The figure for the construction industry is even greater, at 25 percent. Companies providing household appliances report a similar increase. The situation is even more dramatic for US companies which utilise large quantities of steel in their manufacturing processes. These include shipbuilders and suppliers of shipping containers, which have been subject to steel price increases of 43 and 36 percent respectively, so far this year.
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