In response to the recommendations of the American Trade Department to President Donald Trump, which were disclosed on Friday 16 February, to adopt tough measures - global taxes, specific ones for certain countries or quotas - to limit imports of steel and aluminium to the United States, the European industry has urged Washington not to declare a risky trade war.
In its conclusions following the investigation requested by Trump in April 2017 and which would give his administration, under a clause ('section 232) of the 1962 Trade Expansion Act, full powers over Congress to limit imports that may call into question the security of the country, the American Trade Department has suggested measures such as bringing in a tax of at least 24% on imports of steel and of at least 7.7% on imports of aluminium.
As an alternative option, it recommends taxes of at least 53% on imports of steel from 12 countries - including Brazil, China and Russia - and of at least 23.6% on imports of aluminium from China, Hong Kong, Russia, Venezuela and Vietnam. The other countries would be given quotas.
A third option suggests the American President impose global quotas, based on 63% of the steel exports of each country in 2017 and on 87% of their exports of aluminium.
Trump has until 11 and 20 April respectively to decide whether or not to impose restrictions on imports of steel and aluminium.
The European steel industry association Eurofer immediately warned of the risk of appeals to the WTO over these measures, which would trigger a wave of trade reprisals. It called for concerted action within the G20 forum on global capacities.
The association stresses that the EU steel industry has long been a reliable supplier of high-quality steel to the United States. It adds that the EU and the US are close partners and allies of NATO, regretting that any restrictions on European steel would damage this partnership.
It goes on to stress that whichever option is selected, it could mean a mass re-routing of steel products related to the United States into the open market of the EU, which could seriously and unfairly harm EU producers, it added, stressing that it expected the EU to respond with appropriate measures, including safeguard measures.
“The root cause of the main challenges (…) is global excess capacity, in particular in China. [This] is a global and structural problem that requires a global and long-term solution, such as the creation of a Global Aluminium Forum within the G20”, states the European aluminium industry Association, European Aluminium.
It also stressed the close links between the American and European value chains in the aluminium sector, in which 15 multinationals are members of both European Aluminium and its American counterpart, the Aluminium Association. (Original version in French by Emmanuel Hagry)