US section 232 outcome may launch trade wars, EU warns
As SteelOrbis previously reported, the US is presently assessing the steel industry and possible protectionist measures on national security grounds. From the discourse to-date, Commerce Secretary Wilbur Ross is expected to announce results of the investigation this week or next. According to some sources, the Trump administration will most likely not release the report this week but may do so prior to the G20 summit on July 7. The rhetoric is pointing to some action, though, given the promises to the steel industry.
“This may be the most important trade decision that we’ve seen in decades,” says Edward Alden, a senior fellow at the Council on Foreign Relations. “It’s extremely significant.”
Canada, Mexico, Brazil, the European Union and Japan are among the top steel exporters to the United States. China, which Trump has criticized for hurting the US steel industry, ranked 11th last year, and trade experts say it is still a likely target due to the global overcapacity. A key concern is how exactly will tariffs be implemented. Additional countries which may be affected are South Korea and Vietnam.
Cecilia Malmström, EU trade commissioner, is urging the Trump administration not to proceed with a generalized tariff on steel imports, saying such a move would be “very bad” for Europe. She stated, “We would have to see if that measure follows the World Trade Organization (WTO) — and if it hits us hard, we will of course retaliate.” Of concern is retaliation with tariffs not only against US steel products but also against agricultural goods and other industries. The US agriculture industry exports approximately 25 percent of its production.
The anticipated US restrictions have already led to protests from Canada, Mexico, Germany and other individual countries. Steel from Europe, Canada and Japan could be hardest hit if Washington proceeds with national security penalties. Separately, Ms. Malmström said talks continued in Tokyo on an EU-Japan free trade deal. “We are in a very intense phase of our negotiation and hope to close an agreement in principle very soon,” she said. The threats to NAFTA and other agreements by the present US administration has encouraged many including Mexico and the EU to seek other bilateral trade agreements.
*This was published on SteelOrbis website on June 27, 2017.