Ever since US President Donald Trump announced a blanket tariff of 25% on all steel imports into the country, the EU steel industry has been on 'death watch'.
The European steel industry had metaphorically eaten its last meal and was strapped to the gurney awaiting the end. It was simply a matter of uttering a final statement, followed by the words 'go ahead, warden' and it would all be over – bar a last minute stay of execution.
Fortunately, the red telephone on the wall rang out at the 11th hour, but all that was announced was a new execution date: 1 May 2018.
Axel Eggert director-general of EUROFER (the European Steel Association) commented: "The US has only suspended the EU’s inclusion provisionally.” He thanked Commissioner Malmström and the European Commission for their 'determined efforts' to save the EU steel industry's bacon, but warned that the risk is that Trump will only extend the suspension if substantial concessions are made before the new date.
EUROFER has pushed for safeguard measures that ensure the stability of the EU steel market. These remain relevant given that various other countries also presently suspended from inclusion might ultimately be hit with Section 232 measures. The risk of damaging trade deflection remains high, according to EUROFER.
“The European steel industry has crawled through a decade of exogenously-induced crisis – a crisis that we are only just emerging from”, Eggert stressed. “We cannot face seeing this fragile recovery put at risk as a result of steel deflected from the US market. This is why we continue to call for quickly deployed, broad, quota-based safeguards that keep the EU market open but fully reflect the scope of the US measure”.
As EUROFER pointed out, the US Section 232 investigation covered a wide range of steel products, including finished, semi-finished and tubular steel, of all qualities, including stainless. The EU exports about 5Mt/yr of these products to the US annually and regards the USA as one of its most reliable trade partners.
“The danger to the EU steel market has not disappeared. The EU is a larger importer of steels than the US – 40Mt last year compared to the US’ 35Mt”, added Eggert. “In the first two months of 2018, the mere whisper that the US would impose measures has coincided with a 12% surge in imports to the EU”.
“It bears repeating: the EU has only been provisionally suspended from measures. We now need clarity about ways the EU and the US can come to a longer-term, common understanding before 1 May if the exclusion is to be indefinite,” concluded Mr Eggert.