Trade Cases
U.S.-EU Seek Resolution to Section 232 Before Year End: White House
Written by Michael Cowden
June 15, 2021
The White House has confirmed that the United States and the European Union are in discussions to resolve “existing differences” on Section 232 tariffs on steel and aluminum from the EU before the end of the year.
“We are determined to work together to resolve tensions arising from the U.S. application of tariffs on imports from the EU under Section 232, and will work towards allowing trade to recover from its 2020 lows,” the White House said in a statement on Tuesday, June 15.
The White House also said the U.S. and EU would work together “to address excess capacity.”
“We commit to ensure the long-term viability of our steel and aluminum industries,” the White House said. (See No. 21 of the statement here.)
The Section 232 discussions were mentioned in the broader context of a trade dentente. The two sides said they were also working to resolve disputes on large civil aircraft–a reference to long-running trade disputes between U.S. aircraft maker Boeing and EU aircraft maker Airbus.
Section 232 tariffs, 25% in the case of steel and 10% in the case of aluminum, were rolled out by the administration of former President Donald Trump in 2018. Some market participants were surprised at the time that national security tariffs were applied to traditional U.S. allies such as the EU.
A draft communiqué obtained by mainstream media outlets said the U.S. and EU aimed to lift the tariffs by December 1.
Steel consumers in general oppose Section 232. But the national security tariffs and quotas have been popular with U.S. mills and the United Steelworkers (USW) union.
It’s not clear what the implications of any deal might be for other U.S. allies, such as Japan, which is subject to tariffs, and South Korea, which is subject to quotas.
The American Iron and Steel Institute (AISI), a lobbying group representing U.S. mills, welcomed the Biden administration’s shoutout to the issue of global excess steelmaking capacity. The group took a more measured tone on Section 232 and the EU.
To tackle overcapacity, new and effective measures must be implemented to eliminate government subsidies and other market-distorting policies in countries that have contributed to the global steel glut, AISI President and CEO Kevin Dempsey said in a statement.
“Recognizing that these changes in government policies around the world – including in the EU – will take time and will not be easy to achieve, it is essential that the United States maintain strong and effective trade measures to prevent surges in steel imports from around the world that could quickly undermine the U.S. industry and our national security,” he said.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael Cowden
Read more from Michael CowdenLatest in Trade Cases
Mills allege ‘critical circumstances’ in CORE trade case vs. South Africa, UAE
"Recent activity in the marketplace strongly indicates that these imports are being rushed into the United States in an effort to avoid the imposition of antidumping duties," petitioners said.
European Commission eyes retaliation vs. Trump steel tariffs: Report
The European Commission is looking into making current quotas on steel imports stricter as a countermeasure to President Trump’s recently announced tariffs on steel and aluminum imports to the US, according to an article in Reuters.
Trump could levy tariffs on auto imports in April: Report
President Donald Trump said last week that he could place tariffs on auto imports, according to an article in Politico.
Section 232 tariffs are headed downstream
The Trump administration has revealed the list of derivative steel products being added to the Section 232 tariff list.
Leibowitz: In Trump’s brave new world of tariffs, what will stick and what will courts challenge?
With a chronic trade deficit, the administration will continue to cite more tariffs as necessary. This is in error, as noted above. Yet the base of President Trump’s support does not see it that way. More tariffs are possible. But the only way to reduce the US trade deficit substantially is to close the gap between savings and investment in the United States.