Economic Policies Impact

Never seen a rolling mill lose money because of one tariff but seen plenty lose money because they weren't prepared for what came next. Last week, the UK tightened steel import protections by reducing tariff-free quotas and increasing tariffs on imports above those limits. Most people see a trade policy but I see pressure moving through the supply chain. Raw material costs change and margins tighten. Every unnecessary production loss becomes more expensive. This is where rolling mills separate themselves. An unexpected roll change is lost production time where there are shorter rolling campaigns. More opportunities for surface defects. Fewer tonnes produced before the next scheduled shutdown. Those costs rarely appear on a report called "roll performance." They quietly become part of the cost per tonne. The OECD estimates global steelmaking capacity exceeds demand by more than 720 million tonnes. In a market like that, very few manufacturers can influence steel prices. Every manufacturer can influence production consistency. Markets reward efficiency long before they reward capacity. The mills that protect margins producing more predictably. That's a difference every plant eventually feels. We've believed that since 1974. How is your plant reducing cost per tonne when the market becomes less predictable? #Manufacturing #SteelIndustry #SupplyChain #OperationalExcellence

Green Steel Isn’t Just About Net Zero—It Makes Business Sense. The future of steel is low-carbon and high-profit ! In my last post, we explored India's Green Steel Taxonomy and why steel is so carbon-intensive (link in comments)  Now, let’s talk business resilience & profitability for Green Steel—because the numbers speak for themselves. Let’s break this down !  👉 Current Data - most Indian steel production does not qualify as green steel  • Emission Intensity: 2.6 tCO₂/tonne (38% above global avg)  • Indicative Production Cost: $400-600 per tonne   👉 Impact on EXPORTS - Direct Hit to Margins for Inaction & $100B Growth Opportunity for action • Europe Penalties (2026+) for emissions > 2.2 tCO2/t : $65/MT (till 2030), rising to $145/MT (2030+). • Cost Impact : upto 10% -30 % increase • Margins at risk: current ~10% margins, CBAM could turn them negative. • Growth Opportunity : global green steel market : $4 Billion (2024) to $100 billion (2031), CAGR 60%   👉Impact on DOMESTIC Market - Indian Government Prioritising Incentives for Profitable Decarbonisation • 95% of India’s steel serves domestic market, set to grow 1.5 times by 2030  • India’s ₹15,000 Cr ($1.7B) Green Steel Mission is in development, focusing on : green steel Incentives , Lower financing costs , Boosting R&D • 15% Green Steel in Government Purchases by 2031 • Other Govt. Incentives : Renewable energy discounts, Carbon credit trading, Production-linked incentives The BOTTOM LINE ? If steelmakers stay above 2.2 tCO₂/tonne, they face higher costs, lost exports, shrinking margins, and missed growth. Key SHORT TERM solutions ? to cut energy costs, lower emissions, unlock incentives & growth  1. Energy Efficiency: Waste Heat Recovery  • Captures high-temperature exhaust gases  • Cuts energy costs by 20-25%  • Example: JSW Steel’s Vijayanagar plant utilizes waste heat recovery to cut emissions.  2. Material Efficiency: Biochar Blending  • Replacing upto 15% of coke with biochar can cut emissions by up to 20%.  • Cost competitiveness : Biochar $200/tonne vs. Coking Coal $220/tonne.  • Example: Tata Steel Jamshedpur successfully piloted biochar in blast furnaces.  3. Circularity: Scrap Steel Use  • Scrap-based production cuts energy demand by 15% and water use by 40%.  • India produces 25M tonnes per year scrap & imports 5M tonnes.  • 2026 mandate: 8% of vehicle steel must come from recycling—a massive new market.  • Example: ArcelorMittal Nippon Steel India to increase scrap use to 10% by 2030. Whats Next ? Low-carbon fuels, Hydrogen DRI, CCUS Jindal Steel & Power Ltd. Odisha plant deploying India’s largest alkaline electrolyzer for Green H2 🎯 Lets DISCUSS What’s biggest driver for India’s green steel shift—Policy, Tech or Capital? Naveen Ahlawat Ankit Todi Prasad Dahapute Vidya Basarkod, FICE Asad Mahmood Akshay Tandon RAJEEV GUPTA 'Aanvi Mehta Adarsh Das Juha Roininen Steel Authority of India Limited #GreenSteel #ClimateTech #ProfitableDecarbonisation

The tariff storm is here. And if it’s not on your risk register yet—add it now. - Supply chains are shaking. - Material prices are increasing. - Budgets are getting squeezed. Looks like we have an escalating trade war on our hands... 📈 Steel & aluminum up 10-25% ⚡ Electrical & HVAC costs jumping 15%+ 🛑 Labor shortages driving wages higher Is your project protected? If you’re not prepared, you’re at risk of unnecessary budget overruns, supply chain issues, and profit loss. That's why I put together a free Tariff Preparedness Checklist—so you can: ✅ Assess your risk exposure ✅ Identify contract gaps ✅ Communicate better with stakeholders Here are the 9 contract provisions you must review immediately: 1. Material Price Escalation ↳ Check if your contract allows price adjustments for rising material costs due to tariffs. 2. Changes in Laws & Regulations ↳ Look how your contract accounts for cost or schedule adjustments when new tariffs or laws impact the project. 3. Delays & Force Majeure ↳ Verify if tariffs and supply chain disruptions qualify as excusable delays under your contract. 4. Change Orders for Tariff-Related Impacts ↳ Confirm whether you can request additional time or money for unexpected tariff costs. 5. Preservation of Rights for Additional Remedies ↳ Know the deadlines and documentation required to claim compensation for tariff-related expenses. 6. Contingency ↳ Determine if contingency funds can be used to offset increased material costs from tariffs. 7. Insurance & Bonds ↳ Check if your contract requires additional insurance or bonding to cover tariff-related cost fluctuations. 8. Termination & Suspension Rights ↳ Understand if you have the right to pause or cancel work if tariffs significantly impact costs or schedules. 9. Dispute Resolution ↳ Study the process (mediation, arbitration, or litigation) for handling tariff-related cost disputes. This is how you protect your project from tariff risks. Most won’t prepare. The ones who do will turn risk into opportunity. I compiled everything I know—compliance tips, risk strategies, and safeguard resources—into a short guide for project managers. It just went out to 6,400+ project leaders in my newsletter. Inside, I break down: - Why these risks matter - What to watch for in your contracts - How to safeguard your project today And more... Don’t wait for tariffs to impact your bottom line. 📩 Grab the checklist here: [Link in comments] How are tariffs affecting your projects? What are you seeing out there? Let’s talk. 👇

David Sacks on 'All-In' called Trump's tariffs an opportunity. Most teams are panicking about cost increases. Smart negotiators see the biggest supplier leverage opportunity in decades: The All-In crew nailed it: Tariff threats aren't chaos. They're strategic pressure that shifts negotiation dynamics. When trade policy uncertainty spikes, suppliers scramble to model impacts while seeking stability. Your suppliers are feeling that exact pressure right now. Here's what most teams miss: Suppliers need certainty more than margin protection. This creates a narrow window where they'll accept terms they'd never consider under normal conditions. But this advantage closes within 60-90 days as suppliers adjust pricing models and regain confidence. How smart procurement teams exploit this dynamic: 1. Build cost modeling dashboards that expose supplier vulnerability. Map every supplier's margin structure and show how tariffs crush their profitability. Show how duties will eliminate the supplier's gross margin. Result? The supplier will absorb a chunk of the tariff impact. 2. Launch aggressive opening bids using duty announcements as leverage. Don't ask for 5% discounts. Demand changes: pricing resets, extended payment terms, volume commitments. Use this framing: "Given the announced tariff structure, we need to restructure our relationship." 3. Activate near-shore contingency sourcing immediately. Identify backup suppliers in Mexico, Canada, and low-duty regions. Make them visible to current suppliers to create real negotiation pressure. 4. Implement value-share clauses that capture duty relief savings. When tariffs get reduced, you automatically receive a percentage. Build price-reset mechanisms tied to future policy shifts for permanent competitive advantages. The execution strategy: Run parallel negotiations with your top 5 suppliers, representing 60% of spend. When one accepts new terms, others quickly follow to avoid losing their position. This tariff environment is permanently reshaping supply chains. Teams that move now establish competitive advantages for the next decade. The challenge: Executing 15+ simultaneous supplier renegotiations while managing daily operations requires a high level of bandwidth and experience. This is where my team's expertise becomes valuable. We've refined these strategies through real implementations with experienced negotiators who manage complex relationships without disrupting operations. What tariff challenges are you facing today?

Amid the recent U.S. trade tariffs on Canadian steel and aluminum, we have a unique opportunity to transform challenges into a catalyst for innovation and sustainability. It’s time for Canada to lead by focusing on green production and diversified export markets. Here’s a three-step strategy to drive our industry forward: 1️⃣ Expand into New Export Markets -- Focus on regions that value low‑carbon inputs. For example: Europe: Germany’s automotive giants (Volkswagen, BMW Group, Daimler Truck AG), France’s construction leaders (Vinci, Bouygues, Eiffage), and the Netherlands’ advanced green tech innovators (Philips, ASML) are demanding "sustainable green metals". Plus, the European Commission is setting progressive standards that favor low‑carbon products. Asia: Japan’s Nippon Steel and South Korea’s POSCO are spearheading decarbonization, making them ideal partners for Canadian green steel and aluminum 🌍📈 2️⃣ Invest in Green Production Technologies Capitalize on Canada’s abundant renewable energy—especially hydroelectric power in Quebec and British Columbia. Support and scale pilot projects like Algoma Steel Inc. hydrogen‑based direct reduction initiatives through dedicated funding from programs like SDTC?!? ⚡️🌿 3️⃣ Leverage Canadian Research & IP Tap into the innovative work of our universities and research institutions. Facilities like the University of Calgary’s Energy Materials Centre and NRC’s CanmetENERGY Ottawa | CanmetÉNERGIE Ottawa are developing breakthrough technologies in carbon capture and low‑energy production. By fostering collaborations between academia, industry, and government, we can fast-track these innovations to commercial scale. 🎓🔬🚀 Transform this challenge into a launching pad for a greener, more resilient future for Canada’s metals industry. Please DM if you're a researcher, entrepreneur working in these sectors and looking for commercialization/ Global GTM support! #GreenSteel #GreenAluminum #CleanTech #Innovation #Sustainability #CanadianIndustry #TradeStrategy

Here is my perspective on how CBAM will reshape roles in international trade. While the full impact of CBAM hasn't completely materialized yet—and currently, only the EU is enforcing these rules (with the UK joining next year)—I firmly believe a fundamental shift is underway. Every player will inevitably stretch toward more profitable positions in the value chain. The classic "Smile Curve" is undergoing a violent distortion under the weight of compliance. Carbon data has officially replaced pure cost-cutting as the "new currency" of cross-border trade. Amidst this restructuring, how will the profit pools of the five core players in global trade evolve? 🏭 1. Manufacturers (Factories): From "Bottom-Tier Laborers" to "Core Dealmakers" Source factories holding scarce, verifiable "low-carbon data" (e.g., EAF technology, green power) will bypass traditional middlemen to deal directly with massive European buyers. Instead of earning meager processing margins, they will directly harvest the "carbon asset premium." 🚀 2. Trading Companies: From "Information Arbitragers" to "Compliance Orchestrators" Pure-channel traders stripped of their information advantage will exit the EU market. However, "super players" who provide a "physical goods + carbon accounting" one-stop solution—or even register EU entities to quote DDP (Delivered Duty Paid) prices—will secure high-premium profits by monopolizing bilateral compliance. 🏢 3. European Importers: Forced into "Upward Penetration & Vertical Integration" As the primary liable parties under CBAM, importers seeking to avoid astronomical fines will bypass the noise and go straight to the manufacturing source. By deeply binding with or investing in high-quality, low-carbon factories, they will eliminate inefficient middlemen to gain absolute control over source data. 💼 4. Sourcing Agents: Evolving into "Local ESG Auditors" European buyers thousands of miles away cannot verify domestic scrap steel ratios or green energy bills. Smart sourcing agents are rapidly pivoting to become "on-site carbon data auditors," shattering the low-end commission ceiling to command lucrative professional consulting and compliance fees. 👑 5. End Brands / Retailers: Accelerating "Internal Sourcing & Nearshoring" To achieve "zero compliance risk" and harvest green premiums, retailers will shift procurement to within the EU (exempt from CBAM declarations) or pan-European regions like Turkey (leveraging EAF advantages). Coupled with today's frequent shipping disruptions, they are motivated to cut off high-risk, long-arm supply chains at the root. 💡 The Endgame: The global supply chain is drastically shortening. At the future international table, only two types of players will take the biggest slices of the pie: source factories with ultimate low-carbon manufacturing capabilities, and super platforms that bridge cross-border carbon data. #CBAM #SupplyChain #GlobalTrade #TradeCompliance #Manufacturing

🇮🇳 Indian Steel Faces Chinese Price Undercutting – What’s Next for Domestic Safeguards? 🛡️ Despite a sharp rise in domestic steel prices (₹48.5K ➡ ₹52K/tonne from March to April), Chinese steel continues to undercut Indian offerings by 5–12%, selling at just ₹46K/tonne, driven by oversupply, subdued demand, and strategic pricing tactics including FOB discounts and routing via FTA countries like Vietnam. The uncertainty around the implementation of safeguard duty (expected at ~12%) is creating a holding pattern among Indian traders. If imposed, it could level the playing field by pushing landed Chinese prices up by ₹6,000/tonne, narrowing the competitive gap. ⚙️ What can India do to safeguard its domestic steel industry? ✅ Swift and transparent execution of safeguard duties to prevent speculative buying and protect Indian mills. 🧾 Tighten BIS certification norms and ensure prompt reviews of non-compliant exporters. 🌐 Monitor circumvention through FTA routes (e.g., Vietnam) and revise trade terms if misuse is detected. 🌱 Promote local steel consumption through infra push and incentives for MSMEs and OEMs sourcing domestically. 📈 Incentivize R&D and value-added production to reduce reliance on price-based competition. The Indian steel industry is at a critical juncture—balancing competitiveness, trade fairness, and global collaboration. Proactive policy moves are vital to ensure that domestic value creation and employment are not compromised by dumping practices. #SteelIndustry #TradePolicy #IndiaSteel #ChineseSteel #SafeguardDuty #MakeInIndia #FairTrade #MSMEs #InfrastructureGrowth #BISCertification #SupplyChainSecurity

Contracts are powerful instruments that can help firms navigate the growing uncertainty of global tariffs. In an international trading environment marked by frequent policy shifts, tariff changes can disrupt supply chains, inflate costs, and erode profit margins. Well-crafted contracts allow companies to anticipate these risks and allocate responsibilities in ways that protect operational stability and business continuity: 1). One of the most effective strategies involves specifying the payment of duties and taxes through the USE of internationally recognized INCOTERMS. By clearly defining whether tariffs fall under the responsibility of the seller or the buyer, companies can avoid ambiguity and legal disputes. For example, terms such as Delivered Duty Paid (DDP) place the burden on the seller, while Ex Works (EXW) shifts it to the buyer. This clarity is essential in cross-border trade relationships, where unexpected tariff increases can trigger tension and financial losses. 2). Firms can also EMBED PRICE ADJUSTMENT CLAUSES that allow for contractual prices to shift in response to tariff-related cost increases. These clauses ensure that neither party is disproportionately affected by external economic shocks. If new tariffs raise production or import costs, the agreed price can be renegotiated, preserving the economic intent of the contract. In addition, “change in law” provisions can provide further flexibility. Such clauses allow for contract modifications—or even termination—if new regulations, including tariffs, substantially alter the conditions under which the contract was signed. These mechanisms protect both parties and encourage continued cooperation even amid trade volatility. 3). Another useful feature is the inclusion of hardship or FORCE MAJEURE CLAUSES. While traditional force majeure clauses often cover natural disasters or wars, they may not account for the economic hardship caused by sudden tariffs. Tailoring these clauses to include significant cost increases due to tariffs enables firms to seek relief or renegotiation when fulfilling the contract becomes excessively burdensome. In some cases, this might also lead to the contract’s termination if performance becomes economically unviable. 4). Regular CONTRACT REVIEW is also critical. In a world where tariffs can change with the stroke of a pen, businesses must routinely assess their contractual exposure and ensure terms remain aligned with current trade realities. This includes updating dispute resolution procedures to facilitate quicker, more efficient outcomes if disagreements arise. Firms should also leverage technology, such as contract lifecycle management tools, to monitor obligations, assess tariff impact, and simulate risk scenarios. These systems support informed decision-making and ensure that necessary changes are implemented in a timely manner.

Tariffs, Trade & Tomorrow – timely and well-framed discussion that echoes what many of us are hearing on the ground: uncertainty is no longer the exception—it’s the environment. With reports this week suggesting the effective tariff rate on some Chinese steel now hits a staggering 145%, the message to suppliers, specialty contractors, and project owners is clear: proactive risk management isn’t optional—it’s mission critical. Key takeaways from this piece and recent developments: 1. Lock in pricing early. Material cost volatility—from aluminum to flat roll steel—can crush margin and stall project timelines. 2. Use smart contract clauses. Price escalation and tariff surcharge provisions should be standard in today’s bids and POs. 3. Track trade developments. U.S. tariff policy can shift overnight—impacting not just steel but also HVAC, solar, and prefab components. 4. Review cross-border sourcing. If your materials touch Canada or Mexico, understand the evolving USMCA carveouts and compliance risks. 5. Plan for workforce disruption. Immigration policy changes (or the threat thereof) will continue to reverberate across construction labor markets. As construction professionals, we can’t control the tariff tides—but we can build better boats. Events like CreditScape by Credit Management Association and METALCON 2025 are the right forum for sharing strategies and forging smarter paths forward. Always happy to compare notes with others navigating this evolving landscape. #Tariffs #ConstructionRisk #MetalDesign #TradePolicy #CreditManagement #ContractClauses #METALCON2025 #SupplyChainStrategy #SteelIndustry #ConstructionEconomy https://lnkd.in/gAtrN3iA