US steel industry groups expressed optimism in response to a deal made Oct. 30 between the US and EU replacing the former’s 25% steel tariffs on European metal with a quota system.
American Iron and Steel Institute CEO Kevin Dempsey said Oct. 30 the agreement will allow the US and EU to develop a renewed partnership to address global steel excess capacity and climate policy without sacrificing necessary protections for domestic steel producers.
“We thank [US Commerce] Secretary Raimondo and [US Trade Representative] Tai for their efforts to ensure that… a tariff-rate quota will be maintained under Section 232 to prevent another steel import surge that would undermine our industry and destroy good paying American jobs,” Dempsey said in a statement.
The import tariffs of 25% on steel and 10% on aluminum were introduced by former President Donald Trump in March 2018 using a national security justification under Section 232 of the Trade Expansion Act of 1962.
“We appreciate the Biden administration’s continued recognition that the American steel industry is critical to our national and economic security,” Dempsey added. “Proper implementation and enforcement of the TRQ will be crucial to ensuring that the new measures are effective in meeting these critical objectives.”
Steel Manufacturers Association President Philip Bell welcomed the removal of tariffs and the initiation of a quota system. However, he added that the quota system should now be followed by efforts to restrict the US’ tariff exclusion provisions.
“We believe that with the additional EU volumes not subject to quota, there is a renewed need for the administration to narrow the exclusion process substantially,” he said. “Many exclusions will not be needed as new investments by the US industry come online.”
The aggregate annual import volume for US steel shipments from the EU under the tariff-rate quota is set at 3.3 million mt under 54 product categories over the next two years, according to a joint statement issued by US and EU officials.
US producers echo positive sentiment
US-based steelmakers Cleveland Cliffs and US Steel echoed the positive sentiment from the AISI and SMA.
“Today’s announcement of an alternative Section 232 measure with the EU is evidence that President Biden and his administration understand the critical role of the steel Section 232 program in providing a level playing field for American companies and workers,” Cliffs CEO Lourenco Goncalves said in a statement. “This tariff rate quota arrangement will guard against a harmful surge of steel imports from the EU.”
US Steel said it supported the agreement’s effort to prevent transshipment of other foreign steel from countries like China, through the EU, to the US.
“We especially want to recognize the leadership of Secretary Raimondo and Ambassador Tai, including for ensuring the EU arrangement requires that only steel melted and poured in the EU qualifies for the tariff rate quota,” US Steel said in a statement. “Global overcapacity must be confronted and significantly reduced, and until that occurs, our nation should maintain the Section 232.”
Both US Steel and Cliffs lauded further efforts by the US and EU under the new deal to address global overcapacity and the carbon intensity of steelmaking.
— Nick Lazzaro