ArcelorMittal safe from Trump's import tariff hike: Moody’s Investor Service

KOLKATA: Moody’s Investor Service has said ArcelorMittal is likely to be protected by direct manufacturing presence in the US, despite its high exposure in that country where it generated 21% of its sales in 2017. The comments by the global ratings agency come in the wake of US president Donald Trump’s decision to impose a steep 25% tariff on steel imports. ArcelorMittal, the world’s largest steel company, recently put in a bid in joint venture with Nippon Steel to acquire Essar Steel in India.

The company exports semi-finished products such as slabs from its Brazilian and Mexican plants to the US, and sells finished products especially for the US automotive market from its Canadian plant. Moody’s said it could be hurt by tariffs on semi-finished steel products from Mexico and Brazil and/or finished products from Canada. Moody’s views were part of recent report ‘US import tariff is credit negative for the European steel industry’ where Moody’s said that the tariff will not impact ArcelorMittal, one of its rated steelmakers in Europe.

“At the same time, the US-based facilities would benefit from the tariffs, as a result of higher prices and utilization rates, with a likely material positive impact on ArcelorMittal US’s performance,” the agency noted. Any retaliation by the EU against the US would be neutral for ArcelorMittal because it does not rely on steel imports from the US to Europe, Moody’s pointed out.