U.S., European Union Reach Deal To Scale Back Section 232 Metals Tariffs
A Biden administration official announced on October 30 that it had reached a deal with the European Union (EU) regarding the United States’ Section 232 tariffs on steel and aluminum. U.S. Secretary of Commerce Gina Raimondo spoke about the deal in remarks Saturday, but offered few details.
National Public Radio ((NPR) offered a broad explanation. It said, “The United States will keep steel and aluminum tariffs on European nations, but will allow a certain amount of steel and aluminum produced in the EU to enter U.S. markets tariff-free.” In return, NPR said the EU will end retail tariffs it had put in place against U.S. consumer products. Under the agreement, the EU and the United States also agreed to negotiate the world’s first carbon-based sectoral arrangement on steel and aluminum trade by 2024. The arrangement will be focused on addressing carbon intensity and global overcapacity.
Read the Office of the U.S. Trade Representative’s fact sheet regarding the agreement here.
While Secretary Raimondo did not offer many specifics, she argued, “By agreeing to this framework, we are protecting American jobs, we are showing that clean manufacturing can be good for business and consumers, we are creating more incentives for steel and aluminum consumers to purchase American and European products, and we are helping the planet.” Read more from the U.S. Department of Commerce here.
Over the weekend, the Commerce Department also announced “United States is consulting closely with Japan on bilateral and multilateral issues related to steel and aluminum, with a focus on the impacts of overcapacity on the global steel and aluminum markets, the need for like-minded countries to take collective action to address the root causes of the problem, and the climate impacts of the sectors.”
As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.
Click here to review all of MSCI’s advocacy on Section 232 tariffs.