Following the announcement of an extension to the EU's exemption from US steel tariffs, leading figures from the European steel industry have been airing their views on the subject.
In London, UK Steel director, Gareth Stace commented that the news will be greeted with 'a certain sense of relief' for steel producers in the UK. "A further extension to the EU exemption gives us a little more breathing room to continue discussions and find a way through the current impasse to reach a permanent agreement that works for all parties," he said, adding that the extension of just 30 days 'does not give us much time'.
Meanwhile, in Brussels, EUROFER's director-general Axel Eggert said that the US decision was 'welcome, if temporary'. He added that "the EU will now be exempted for another 30 days, to give time for further discussion”.
Stace argued that all signs point towards a US insistence on the restriction of steel exports by its allies. "Such an outcome would be viewed in a dim light by many here; indeed for some it could have a greater impact than tariffs alone," he said.
According to Stace, calls for the EU to place hard limits on its exports of steel are unjustified, against WTO rules, and run counter to the central tenets of free-trade. "It is only right that they have so far been rebuffed," he said.
Stace believes that both tariffs and quotas would be negative all round. He claimed that US steel consumers are already reporting price increases and supply chain disruption.
Looking at the bigger picture, Stace said that tariffs can only lead to an escalation towards a global trade war 'that is in no-one's interests'.
“The only sustainable solution to the root cause of the issue, global overcapacity in steel production, is multilateral discussions and action through established international channels. This must continue apace," said Stace. “Regardless of the ultimate outcome of EU and US discussions, it is vital that the EU forges ahead with its own safeguard action, to ensure domestic producers are not hit by an import surge resulting from millions of tonnes of steel diverted away from the US towards the EU in the months ahead.”
Eggert said that the EU must not bend to unilateral trade measures and should continue to back multi-laterial solutions under the World Trade Organisation (WTO). “Despite all the evidence of the harm to the EU-US relationship – and to our respective economies – the Administration has opted to continue a policy of uncertainty in its international trade practice”, he added.
EUROFER supports the efforts of EU and member states to motivate the US to treat the EU like the geopolitical and economic ally. If the US Section 232 measure has to remain in place, the EU should – at a minimum – be permanently excluded from its provisions.
“We believe that as reliable US partners there is no grounds for the EU not to be excluded and welcome the Commission’s efforts to ensure continued access to the US market”, added Eggert. “We also support the Commission’s work in making sure that the US is aware it cannot take unilateral measures without trade consequences”.
EUROFER is concerned that the surge in imports already seen in the first few months of this year will only be exacerbated as countries also previously excluded from the measures direct their deflected products to the open EU market.
“The EU’s possible safeguard measure should be broad and cover a wide scope of products whilst maintaining access to traditional trade flows. It is important to stress that any safeguard – which remedies import surges – would be independent of whether the US gives the EU and exemption, either now or next month”, concluded Mr Eggert.
