Trade Cases

Consumer Trade Groups 'Disappointed' in U.S.-EU Deal on S232

November 1, 2021

The deal just announced between the U.S. and EU to replace the Section 232 tariffs with a tariff rate quota and to cooperate in reducing climate-changing carbon emissions was seen as a breakthrough by many – but not all. Trade groups representing steel consumers and producers from other parts of the world expressed “disappointment” that the deal swapped one trade restriction for another rather than simply opening the market to free trade.

thumbs down “News of a U.S.-EU agreement to end the existing Section 232 steel and aluminum tariffs for a certain amount of imported steel is good news for U.S. manufacturers who continue to experience the highest prices in the world and long delivery delays. However, it is disappointing that the agreement will not completely terminate these unnecessary trade restrictions on our allies,” said a statement from the Coalition of American Metal Manufacturers and Users. CAMMU claims to represent 30,000 manufacturers who employ more than a million American workers.

CAMMU is concerned that replacing the tariffs with a TRQ will hurt its members because the threat of tariff reinstatement looms if passage of the infrastructure bill by Congress causes a new surge in steel and aluminum imports. “The U.S. domestic steel sector does not need protection from competition, and the U.S. should immediately begin negotiations to lift these damaging tariffs on our other close allies and trading partners,” CAMMU wrote.

“Saturday’s announcement that the United States and the EU have agreed to a tariff-rate quota system as a ‘pause’ in their 232-related steel and aluminum trade dispute…leaves much to be desired,” said Richard Chriss, president of the American Metals Supply Chain Institute. AMSCI, formerly the American Institute for International Steel (AIIS), is a lobbying group that advocates for open markets and free trade for the metals supply chain, including foreign mills.

By not terminating the tariffs across the board and withdrawing the administration’s determination that EU steel imports are a national security threat to the United States, the agreement leaves in place a regime that has raised the cost of steel used in the construction industry, in consumer goods and in energy production. Since their inception, Section 232 tariffs have hit American manufacturers particularly hard. Because so many American manufacturers use imported steel products as inputs in goods that they later sell to consumers here at home, or in products that are sold overseas, Section 232 tariffs are a “made in America tax,” adding to the inflation hitting Americans hard in the pocketbook, AMSCI said.

“The EU is not, and has never been, a threat to U.S. national security in any context or to any degree. The administration should end the Section 232 tariffs, period,” Chriss said.

AMSCI also renewed its call for Congress to enact legislation that ensures closer scrutiny of executive branch decisions to employ national security-based trade restrictions.

Tim Triplett, Tim@SteelMarketUpdate.com