Trump’s Decision Affects Seamless Pipes Production in Rustavi
By Levan Khutsishvili
Friday, June 8
On March 1, the President of the United States Donald Trump, decided to impose 25% tariff on steel import, and 10% tariff on aluminum to save jobs for US citizens working in steel and aluminum production. Trump’s plan directly influences the imported steel and aluminum from China and Europe.
"If you talk China, I’ve watched where the reporters have been writing 2 percent of our steel comes from China. Well, that’s not right. They transship all through other countries," Trump said. "It doesn’t look good when it all comes out of China, so they send it through other countries, and it comes to us. And it’s putting our steel mills out of business," – said Donald Trump.
But it is not only big players who will suffer from regulations, this initiative will affect the future of Rustavi Metallurgical Plant (“Rustavi Steel”). The case is the export of seamless pipes produced in Rustavi to the US market. According to the director of Rustavi Metallurgical Plant, this project is very important for his company. They were preparing for it for two years and now, everything is in danger because of the announced regulation.
"The first export to America was the high quality large diameter seamless pipe, which is the most high-tech product that Georgia has ever exported in large quantities, and we have put a lot of effort in achieving this. About three years ago we invested in installing new technologies, received the certificate appropriate for the US market and a quality control certificate. Few months ago, reportage was made about seamless steels, where the US was named as a strategic partner and possibilities and advantages of free trade was underscored. Unfortunately, in March, Trump established a 25% tariff, which directly influences us. This threatens our production and our whole program. If you will be obliged to pay an import tariff of 25%, which was established by the president's office, exports of seamless pipes may no longer be financially profitable, " – said Nugzar Kachukhashvili, director of “Rustavi Steel”.
Kachukhashvili believes that the government should be involved in the negotiations with the US government. And it can be helpful for “Rustavi Steel”, as it is not an influential side and cannot “confront the US market”. At the same time Donald Trump mentioned that some exceptions for the allies of the US will be made, he spoke about the possible negotiations with Mexico and Canada, but Georgia also can be a part of this “club”, as it is a strategic partner of the US, as it was mentioned many times by all administrations during the last 25 years. The US openly supports Georgia and claims its ready to contribute to its development.