United States Considering Steel, Aluminum Quota For EU Products
As Connecting the Dots has reported several times over the last few months, President Joe Biden has elected to keep the Trump administration’s Section 232 tariffs on steel and aluminum in place for the time being. While some administration officials have argued the penalties are helping to address global overcapacity, according to a report from Bloomberg the administration now is considering moving to a quota system for steel and aluminum that is imported from the European Union (EU). These tariff-rate quotas would allow countries to export a specific quantity of a product to the United States at lower duty rates, but all imports above a pre-determined threshold are subject to a higher duty.
The Office of the U.S. Trade Representative (USTR) and the U.S. Department of Commerce Department also are reportedly looking at how to provide for increased monitoring of the origins of industrial metals produced in the EU.
As Bloomberg noted, a final determination has not yet been made regarding the quotas or monitoring. But in a statement to Bloomberg, USTR spokesperson Adam Hodge said, “We continue to have productive conversations with the EU to address our shared concerns about excess capacity, and ensure the long-term viability of our steel and aluminum industries.”
As Connecting the Dots also has reported, earlier this year the United States and EU agreed that the underlying problem of global steel overcapacity is one largely caused by China and that the United States and EU need to work together to solve it. European Commission Vice President Valdis Dombrovskis said last week that he is optimistic the EU and United States will reach a deal. “After the EU-U.S. summit I am more optimistic that the solution will be found, so we are now engaging closely with the relevant departments in the U.S. administration,” Dombrovskis said.
In related news, the Coalition of American Metal Manufacturers and Users, which represents U.S. metal manufacturers and users, issued a statement on September 1, 2021 calling on President Biden to eliminate the Section 232 tariffs for all steel imports. Read more here.
MSCI is reporting this information for its members information only. As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly those carried out 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 how any new trade policy would impact the entire supply chain. Click here to review all of MSCI’s advocacy on the Section 232 tariffs.