US President Joe Biden seeks to end the trade dispute with Europe, launched by Donald Trump, who imposed duties on steel and aluminum supplied from the EU, but efforts in this direction are facing serious resistance from the US steel industry.
American steelmakers are thriving in the face of rising prices for their products, as well as industry consolidation, and Trump’s 2018 25% duty on steel imports is having a beneficial effect on their businesses. Stocks such as Nucor, Cleveland-Cliffs, Steel Dynamics and US Steel have more than doubled over the past year, according to S&P Global Market Intelligence.
Europe, however, wants to lift the current tariffs on steel and aluminum … Earlier this month, the EU postponed a June 1 increase in import duties on US goods in preparation for negotiations with the Biden administration on EU steel and aluminum supplies.
By meeting Europe, the Biden administration risks angering the steel sector , writes the Financial Times.
“Steel is a symbol of US power and is considered the basic American industry,” said Paul Sracic, professor of political science at Youngstown State University. The removal of duties will be “politically very difficult indeed,” he said.
Representatives of the steel industry, including trade unions, sent an appeal to Biden last week, in which they said that the removal of import duties was negative will affect an industry that is already struggling with China’s subsidies to its own steel producers.
They argue that the rise in steel prices is part of an overall upward trend in demand, which is also affecting the sawnwood, semiconductor component markets and agricultural products, and not as a result of the existing import duties.
“We came from a situation where demand was practically zero and there were no stocks of products, to the fact that the economy coped with the pandemic better than expected, and we’re seeing huge deferred demand not only for steel, but for many other commodities as well, “says American Steel Association head Fi l Bell.
Companies using American steel in their production are calling on Biden to remove import duties, and the US Chamber of Commerce notes that rising steel prices are a serious problem for them. Representatives of about 300 small companies in the past sent their own appeal to Biden, in which they stated that they have to pay 40% more for some types of American steel products than their European competitors pay for similar products.
“No the lifting of duties will worsen even more when Washington accepts an infrastructure investment package, the letter said. “New projects will create tensions in the supply of American steel and aluminum, which will lead to delays in construction and jeopardize the corresponding jobs.”
Some of the steel industry backing import duties are open to the idea that Biden will lift tariffs on Europe in exchange for tougher EU action on China, and support local steel producers with infrastructure investments.