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USA: Global:
Sun, Jan 26, 2020, 8:33:34 ---- The fact: 42.844.000 visitors done.

UK and EU fail to prevent US protectionist tariffs on steel
Steel Business Briefing
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Company: Steel Business Briefing, United Kingdom
Attn: Patrick Flockhart

The USA s decision to put tariffs of up to 30% on imports of its main steel products has to be seen in the historical context of the failure of its industry to restructure over the last 30 years. The UK and European industry has restructured much of the US industry has not - and as a result, many of the company s steel producers are now bankrupt.

The USA is already protected by more than 200 measures aimed at unfairly traded steel imports. Despite these, many of America s largest steel producers have failed to cut their costs and modernise sufficiently to compete internationally. It is unclear how the new three-year tariffs will now suddenly change the situation.

In June, last year given some of the lowest US steel prices for many years, President Bush agreed to begin consideration of new safeguard measures to control imports (under section 201 of the US Trade Act). During this nine-month period, the European Commission continued to threaten to refer any US decision to impose tariffs to the World Trade Organisation (WTO). But a WTO decision takes two years. It did little else to combat the strong domestic lobbying power of the US steel industry and its unions.

Safeguard measures are designed by the WTO to protect an industry faced with a surge of imports. Last year, US steel imports declined in total by a fifth to 27.4m tonnes, compared with 2000 hardly a surge Imports from the European Union declined by 14% to 5.5m tonnes, and imports from the UK fell by almost a quarter to 0.46m tonnes

Moreover, the situation has changed since June 2001. Not only have US imports declined, US prices have risen from last year s rock bottom levels by anything up to $90/tonne. US industry is no longer in a crisis situation, but President Bush s decision to ask for a 201 investigation raised US expectations, so that ultimately it was unstoppable. More moderate responses to the situation were ignored (see attached article of 4 March - New proposal for global levy may beat White House 201 deadlock).

The US legislation gives the final decision on protection to the President. He does not need to follow the recommendations of the International Trade Commission (ITC), which votes on whether US industry has been injured by the imports. Nevertheless, the ITC in its report to the President in December 2001 recommended tariffs of 20% on many items. The US steel producers clamoured for 40%. President Bush himself responded with 30% on the eight major items, but less on some smaller items, and nothing on two products. The highest tariffs are on the big volume items, and hence will mainly impact on the world s commodity steel producers (see attached article of 6 March - EU prepares response to US tariffs of up to 30%).

For further information, contact Patrick Flockhart on +44 (0) 20 7626 0600 or by e-mail on

     Tel: +44 (0) 20 7626 0600   Fax: +44 (0) 20 7929 4666
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