As the United States negotiates with the EU on revisiting Section 232 tariffs and the pursuit of decarbonization, two steel groups and the union representing steel workers are pushing for continued steps to ensure there is no surge of imports. The American Iron and Steel Institute, Steel Manufacturers Association and United Steelworkers have written President Joe Biden asking for measures to protect the domestic industry.
“In connection with the administration’s ongoing discussions with the European Union on steel, we are writing to emphasize the importance of maintaining effective trade measures to prevent new surges of steel imports fueled by global overcapacity, including from the EU,” the letter claims.
Citing a study by McKinsey & Company on “The future of the European steel industry,” the letter claims the European steel industry needs to reduce its excess capacity by 25 to 30 million metric tons to achieve a sustainable capacity utilization rates. Additionally, they claim, certain EU governments have announced aggressive new subsidy programs for their steel industries, potentially distorting competition and exacerbating capacity issues.
The groups also cited an Economic Policy Institute report which supported the idea the 2018 tariffs materially improved conditions for the domestic steel industry, resulting in investments of $15.7 billion in new and upgraded facilities. Additionally, the report confirms the elimination of tariffs and quotas in the absence of concrete measures would jeopardize the health of the investments.
“These measures must be implemented on a product- and country-specific basis and ensure that stringent, effective tariffs will be automatically imposed if steel imports from the EU surge above a non-injurious level. This is exactly what the EU has done with regard to its own market by extending for another three years its steel safeguard measure, which imposes a tariff rate quota on steel imports from all around the world,” the letter claims.
Additionally, the coalition said current steel imports from the EU contain steel that has been melted and poured in a number of non-EU countries, including tons of semi-finished steel from Russia, Ukraine and China. These products are rolled, finished and exported, often to the U.S. market.
“There are many ways in which the U.S. and the EU can work together to address this common challenge, including through the establishment of stronger international trade rules against subsidies and other forms of market-distorting government intervention. We should also work with the EU to establish new trade approaches to address climate change, including by developing effective carbon border adjustment measures. But these forms of cooperation cannot substitute for maintaining effective trade measures against import surges, including from the EU, that jeopardize our production, national security, economic health, critical infrastructure and jobs.”