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USA: Global:
Tue, Jan 28, 2020, 9:25:30 ---- The fact: 42.844.000 visitors done.

EU prepares response to US tariffs of up to 30%
Steel Business Briefing
Port Pipe and Tube Inc
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Company: Steel Business Briefing, United Kingdom
Attn: Patrick Flockhart

President Bush has put three-year tariffs of 30% on eight of the 16 categories of imports of steel products. These include most flat products (except electrical sheet, but including tin mill products), and carbon bar. The tariffs on other products such as welded tube, stainless wire, bar and rod are in the range 8-15%. The tariffs are applied on top of any existing AD/CVD duties, and are mostly well in excess of those officially recommended by the International Trade Commission. There are to be no duties on tool steels and stainless flanges.

For semis, the tariff rate quota is 5.7m s.tons which is around today s volume, given the exclusion of Canada and Mexico from all the measures. Imports above this level will also face duties of 30%. The quota is country specific, with other 52% going to Brazil. Many developing countries are also excluded, if they are relatively small producers. The tariffs on all goods will be reduced annually for example, for imports with 30% tariffs, by 6 percentage points annually, it is reported.

The new duties would appear to primarily target the European Union, the FSU/CIS countries, some Latin American countries and East Asia. Eurofer, which represents around 95% of West European producers notes that the decision places a heavy burden on EU exports, though these declined in 2001.

The EU response is expected to include a complaint to the WTO, plus safeguard measures on imports. The EU is likely to want to consult with other major exporters to the USA, including Japan, Korea and Brazil on other possible reactions. The Paris talks on capacity are in any case now likely to die.

Any decision by the WTO is likely to take at least two years, allowing President Bush to be safely re-elected, noted one industry observer. Eurofer also notes that the Presidential decision does nothing, in itself, to address a key cause of the US industry s problems, and in fact will probably delay [its] long-overdue restructuring.

The EU safeguard measures are likely to be designed to continue to allow in imports at around today s volumes. They will also be focused on the same product types that the USA controls, in order to stop diversion. To initiate the process, several Member States have to request their introduction. The European Commission then has to investigate, if suitable conditions exist. This is expected to take some weeks.

It is unclear if the final decision on safeguard measures then has to be agreed by all member states. Some reports say several of the Scandinavian countries may be reluctant to agree.

In January, the Commission denied any link between the imposition of countermeasures of up to $4bn on US exports, in response to illegal US tax breaks for US exporters (though the successor to the Foreign Sales Corporation FSC). Some reports say that though there cannot be a formal link under WTO rules, the issue must now be under informal consideration.

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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