The United States will delay imposing steel and aluminium tariffs against several countries while negotiations to exempt them more permanently are under way with President Donald Trump's administration, according to US Trade Representative Robert Lighthizer.
Talks are ongoing with South Korea, Argentina and the EU and will soon begin with Brazil, he had told the House Ways and Means Committee on Wednesday. Similar talks are expected with “a great number” of other countries.
"We will only believe it when we see it on a paper signed, but it goes beyond rumor, it is almost fact; it would appear that it will be an instant temporary exclusion in the same vein as applied to Mexico and Canada," Charles de Lusignan, communications manager for European iron and steel association Eurofer, said regarding Lighthizer's comments to the US Senate.
"[Thursday’s] decision to not exempt the Japanese steel industry, while at the same time protecting South Korean and Brazilian producers from a blanket 25% tariff, is an outrage and a travesty. South Korea and Brazil maintain a significantly lower price structure than that of Japan. Japanese steel products are the most sophisticated value-added steel in the world and their higher prices reflect that product premium that our loyal American customers demand. Our products do not harm US producers because US mills cannot compete with us on quality, sophistication, durability and reliability. This decision is simply not fair and it defies logic," according to Tadaaki Yamaguchi, chairman of the Japan Steel Information Center.
The administration hopes to conclude negotiations by the end of April, according to Lighthizer.
North American Free Trade Agreement partners Mexico and Canada were excluded from the US duties at the signing of the tariffs. Australia has also since been granted an exemption.
The tariffs - 25% for imported steel and 10% on aluminium - are set to go into effect on March 23 at 12:01 Eastern Standard Time. They were announced as a response to the Section 232 investigation into the national security implications of such imports.
Brazil and South Korea are two of the largest suppliers of steel to the US. Of the 2.61 million tonnes of steel mill products imported by US mills in January, about 12.9% (337,715 tonnes) came from Brazil and 11.8% (307,481 tonnes) came from South Korea, according to preliminary data from the US Commerce Department’s Enforcement and Compliance Division.
Steel consumers have been warning that the tariffs could create steel shortages and send prices soaring in the short term.
American Metal Market’s hot-rolled coiled index has gained 28% since the start of the year, with the latest assessment at $41.78 per hundredweight ($835.60 per ton) on March 15.
Liz Newmark, INS - Brussels, contributed to this article.