Major domestic producers including Cleveland-Cliffs, Nucor Corp and Steel Dynamics Inc (SDI) held a virtual roundtable alongside members of Congress and industry executives on Thursday September 30, putting forth arguments to support the continuation of Section 232 tariffs against EU imports.

Cleveland-Cliffs chairman, president and chief executive officer Lourenco Goncalves and SDI president and chief executive officer Mark Millett noted that Canadian producer Algoma Steel received government funding to support its pivot to electric-arc furnace (EAF) steelmaking.

Additionally, both Millett and Goncalves said that Luxembourg-based ArcelorMittal, the world’s largest steelmaker, has received outside funding, whereas steel producers in the US reinvest their own money in "green" steelmaking.

ArcelorMittal secured a €280-million ($327-million) loan from the European Investment Bank to support its decarbonization objectives, whereas Germany’s federal government plans to fund €55 million ($65 million) for the construction of the first industrial-scale hydrogen direct-reduced iron (DRI) plant at ArcelorMittal Hamburg steelworks.

“I have been calling China the enemy from 2016, but sometimes friends are worse than enemies,” Goncalves said during the roundtable. “We invest our own money, whereas they invest government money.” 

The domestic producers agreed the huge jump in profits the US steel producers have seen this year was made partly possible by the implementation of the Section 232 tariffs in 2018, but said that most US steelmakers have announced new plans of modern steelmaking as a result of those profits.

Thomas Conway, the leader of the United Steelworkers, the largest industrial union in North America, threw his support behind domestic steel producers, noting that mills operating at an average capacity utilization rate of 85% was the sign of a “healthy industry.”

“This industry makes money once in a decade, and they plough it back in,” Conway said.

The roundtable participants were also concerned that the EU may become a backdoor for Chinese steel exporters looking to circumvent prohibitory measures, especially since the US price of steel products remain the highest in the world, attracting imports.

A recent presentation by Nucor showed that US steel sheet imports have decreased to a 13% market share in 2020 from 19% in 2015.

The US Trade Representative and the US Department of Commerce aim to reach an agreement with Europe regarding Section 232 of the Trade Expansion Act of 1962 by November 1.

The Section 232 tariffs - which came into effect on March 23, 2018 - imposed a 25% tax on imported steel and 10% on imported aluminium.

The EU is suggesting the US impose tariff-rate quotas on steel and aluminium imports from the trading bloc, though the shift to tariff-rate quotas is not the only solution under consideration, sources have told Fastmarkets.

The Biden administration may borrow from the United States-Mexico-Canada Agreement trade pact playbook when it negotiates with the EU regarding the future of Section 232 tariffs, a Washington DC-based lobbying and government relations firm told Fastmarkets.

Following the implementation of the Section 232 tariffs in 2018, Fastmarkets’ daily steel hot-rolled coil index, fob mill US surged to $45.84 per hundredweight ($916.80 per short ton) in early July of that year - a nearly 10-year high at the time.

Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $98.08 per cwt ($1,961.60 per ton) on Thursday September 30.

The index reached an all-time high of $98.25 per cwt on both September 20 and 27.