‘Do not pull trigger on trade war,’ Eurofer warns after President Trump receives Section 232 report
European steel association Eurofer has warned the United States that the deployment of blanket trade restrictions as part of a Section 232 remedy will almost certainly be contested by World Trade Organization (WTO) countries and will trigger prompt retaliation.
The European steel industry is concerned that - unless President Donald Trump decides to reject the Section 232 recommendations on steel imports into the US - there could be a massive deflection of previously US-bound steel products to the European Union’s open market, Eurofer said on Saturday February 17.
This could seriously and unfairly injure EU producers, breaking the fragile recovery the sector of the past few months.
“We urge the US president: Do not pull the trigger on a new trade war,” Eurofer director general Axel Eggert said.
Trump received the Section 232 report on steel imports into the US on February 16. US Commerce Department Secretary Wilbur Ross has recommended massive across-the-board tariffs and restrictive quotas following the department’s Section 232 investigations into steel and aluminium imports.
In 2017, the US imported an estimated 784,393 tonnes of steel products from China, according to the Section 232 report, which was made public on February 16.
The Section 232 report, commissioned in April 2017, is the result of US legislation that permits import restrictions on national security grounds.
The two alternatives presented to the president are either for a “global” tariff or quota, or for tariffs on a “subset” of countries.
The “global” alternative would see a likely quota of 63% of 2017 import levels or a duty of 24% applied to all countries and possibly to all steel products.
The country-specific “subset” alternative would see tariffs on Brazil, South Korea, Russia, Turkey, India, Vietnam, China, Thailand, South Africa, Egypt, Malaysia and Costa Rica, with all other countries limited to 100% of their 2017 import level.
“Were either of the two alternatives deployed, we would expect swift and vigorous counter action by the EU in order to prevent any potential negative impact on our industry, including necessary safeguard measures mirroring the product scope and types of any US Section 232 trade measures,” Eggert said.
“The EU has an arsenal of trade remedies and safeguards available to defend its interests. These can be ready to launch in very short order in response to an economic threat, and EU industry will demand their immediate application,” he added.
Eggert also highlighted that restriction on steel imports from the EU, based on Section 232, would undermine this partnership between the EU and the US.
“EU and US producers have both been suffering financial losses and closures since the financial crisis, caused by trade distortions from third countries. Import pressures have significantly affected each market. Until now, both have used targeted trade remedies against demonstrably dumped steel products from third countries – and the EU and US are active members on the G20 Forum on Steel Excess Capacity,” Eggert said.
“We are committed to work with the US and other countries to swiftly eliminate the source of these distortions: global overcapacity. This will not be achieved with scattergun, unilateral measures,” he added.