Top U.S. Trade Official Confident She Will Reach Agreement With EU On Metals Tariffs
As Reuters reported, last week U.S. Trade Representative (USTR) Katherine Tai has said she is optimistic about resolving a dispute with the European Union (EU) over the Section 232 steel and aluminum tariffs that the U.S. government imposed under former President Donald Trump. Tai and her European counterparts have less than six weeks to come up with a solution. That’s because the European Commission, which oversees EU trade policy, has said it would consider increasing retaliatory duties on December 1, 2021.
A statement from Ambassador Tai’s office said she “stressed the need to make rapid progress to reach a consensus to preserve our critical industries and meet the economic and environmental goals shared by the United States and European Union.”
According to Reuters, Tai also “promised the U.S. proposal would ensure the long-term viability of the U.S. and European steel and aluminum industries, while strengthening the transatlantic relationship.” According to unnamed sources, it is likely the USTR will propose to “replace the Section 232 tariffs with an arrangement allowing duty-free entry of a specified quota of EU steel, with tariffs applied to higher volumes.” The size of the quota has not yet been determined.
MSCI is reporting this news for members’ information only.
As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.
Click here to review all of MSCI’s advocacy on Section 232 tariffs.