Trade policy panel at IREPAS: Steel trade under pressure from tariff war
Summarizing the actions of the Trump administration, Matthew Nolan, counsel at ArentFox Schiff LLP, stated that the exemptions from the Section 232 tariffs have been lifted and duties have been almost doubled.
He also pointed out that the announced reciprocal tariffs have been postponed except for the 10 percent duty that every country has to pay. Stating that the US duties on Chinese products will result in some US companies running out of inventories, Mr. Nolan said it is going to be the downfall of the US economy. Saying that the chances of the US fully implementing reciprocal tariffs are very low, he said he believes that the US will sign agreements with some countries, leading to much lower tariff levels.
Regarding the non-tariff barriers and the challenges that companies face, he highlighted the ‘melted and poured’ rule in the US and the restrictions regarding Russian material.
He recommended that exporters navigating the current uncertain trade environment should be patient and added that he does not think the current extreme volatility will last forever and that the US will have to find another way to make its measures sustainable.
The next speaker, Nikolay Mizulin, partner and co-leader of International Trade at Mayer Brown, stated that the trade barriers reflect that the steel markets are increasingly becoming fragmented. Recalling that the EU has also postponed its counter measures against the US, he stated that the negotiations between the US and the EU are continuing, though, in his view, an agreement is unlikely.
He highlighted that the main problem is not the lack of an agreement between the parties but the diversion of steel from the US to the EU from other countries. Pointing out that the current EU safeguard measures will expire in June 2026, Mizulin noted that, as mentioned in the Steel and Metals Action plan, the European Commission will come up with a new protectionist tool, which is planned to be more effective, to replace the current measures in the face of the overcapacity problem.
Stating that the EU has also introduced a ‘melted and poured’ rule, he also added that the CBAM will also play a significant role in the EU’s trade going forward, affecting trade flows.
Meanwhile, regarding developments in the EU steel industry, Bülent Hacıoğlu, managing partner at Trade Resources Company, stated that exporters to the EU will not have a break from tariffs given the new protectionist measures planned.
Saying that the European Commission will no longer wait for actual material injury to occur to implement investigations, Hacıoğlu also highlighted that dumping margins will be much higher as zeroing and lesser duty rules in the EU no longer apply.
Looking at the US, he stated that both the Trump and Biden administrations focused on Customs and Border Protection and added that the current US government will prioritize making sure that all tariffs or duties imposed are collected.
Noting that currently two thirds of all nations in the world have larger trade volumes with China that with the US, he said that the US needs to figure out another way not to experience a recession.
