US taking country-by-country approach to steel, aluminum tariff negotiations

The US will be taking a pragmatic approach on a country-by-country basis to reach alternative arrangements to the Section 232 tariffs on steel and aluminum, with the ultimate vision of creating a global arrangement to address trade distortion and overcapacity, United States Trade Representative Katherine Tai said Nov. 2.

On the heels of the US and EU’s Oct. 30 agreement to replace the US Section 232 tariffs with a tariff-rate quota for EU metals imports, the US is seeing increased interest from trading partners to negotiate alternative arrangements, Tai said during a speech at the American Iron and Steel Institute and Steel Manufacturers Association General Meeting in Washington.

“If we were setting up shop in a physical place, I think the line would be out the door and around the block,” Tai said of the interest from other countries following the announcement of the EU deal.

From the perspective of the US, it is looking for trading partners that are committed to fair and healthy trade that will take effective measures at their own borders to reinforce the environment needed to tackle the global overcapacity crisis.

In the case of the deal with the EU, enforcement will be key, Tai said, adding that she is committed to working with those in the steel industry in the coming months to ensure it is implemented in a way that would not cause harm to the domestic industry.

In terms of the discussions still to come, the focus will be on the “twin challenges” of overcapacity and carbon intensity, Tai said.

“How can we convert the existing measures – which have been effective for American steel and aluminum industries and our workers – how can we convert this current set of measures into measures where we can promote partnership with like-minded trading partners who are aiming for the same thing, which is fair trade in steel and aluminum and clean trade in steel and aluminum?” she said. “…We need to bring as many other partners into an arrangement that does further our interests for healthy competition, fair trade, clean trade for the sake of all of our futures and for the planet.”

One of the biggest challenges in the past was not that the US and other governments didn’t know about the overcapacity problem. They have struggled with how to address the issue.

“What I’m really optimistic about is that we have the conditions right now and we have the will to take the measures that we have in place now and convert them to being more effective by creating room for us to collaborate with those economies that share our values, that are similarly affected by the global overcapacity problem and also bringing them along and locking arms and taking effective measures at our border,” Tai said.

— Justine Coyne