Section 232 tariffs damaging, counterproductive for EU and US, Eurofer says
European steel association Eurofer has condemned the decision by US President Donald Trump to set import tariffs on steel and aluminium as being “damaging and counterproductive for both the US and EU economies.”
Trump set blanket tariffs of 25% on steel imports and 10% on aluminium imports on Thursday March 8. They were announced last week as a response to the Section 232 investigation into the national security implications of such imports. But he excluded the US’ fellow members of the North American Free Trade Agreement (Nafta) - Canada and Mexico.
The tariffs will become effective in 15 days’ time.
“The US measure baselessly includes EU producers, who will suffer significantly from the loss of one of their major export markets. The national security justification that the president has used – and the linking of these tariffs to funding for the North Atlantic Treaty Organization [Nato] – is an absurdity,” Eurofer director general Axel Eggert said.
The US imports around 35 million tonnes per year of steel products. The concern for EU steel producers is not only the potential loss of access to a market with which they have strong commercial links, but even more that a shift in trade movements toward the EU’s open market will be large and sudden, according to Eurofer.
“The loss of exports to the US, combined with an expected massive import surge in the EU, could cost tens of thousands of jobs in the EU steel industry and related sectors,” Eggert said.
“Ironically, estimates also show that the US could also suffer a net loss of jobs as a result of the [Section 232] measures,” he added.
The EU has mainly been supplying steel products with high added value to the US, according to market sources.
“The very real risk of trade deflection will require the EU to react with contingency safeguards to ward off any import surge caused by the Section 232 tariffs,” Eggert added.
“We welcomed the announcement by the [European] Commission [EC] that it would act immediately to defend its industry. We cannot stand idly by while the US lights a match under the global trading system,” he concluded.
Earlier this week, the EC announced a three-pronged approach to the US tariffs and said that sufficient and swift measures will be taken to safeguard the interests and jobs of the EU steel sector as a response to Section 232 actions.