Industry News
Domestic Steel Group Seeks Greater Protection
TweetDec. 3, 2024
By:
David G. Forgue
On December 2, 2024 the Steel Manufacturers Association (“SMA”) in the United States published an “action plan” for President-elect Trump and the 119th Congress to follow to provide further protection to the United States steel industry. The proposal contains points favored by some Republicans as well as by some Democrats and would have serious implications for steel importers and steel users if implemented.
First, the proposal focuses on expanding steel-specific tariffs. In North America this would involve imposing tariffs in certain exports of Mexican steel to the United States as well as monitoring Canadian imports for potential surges. The group also seeks to require that the country of melt and pour of steel be the sole criterion for steel origin in North America. All other steel from Mexico and Canada would be subject to duties based on the country of melt and pour.
In Asia, the proposal seeks different changes depending on the target country. Japan would lose its current quota arrangement while South Korea would see its quotas lowered. China would see an increase in Section 301 tariffs for steel to 60%, in addition to any existing 232 and/or antidumping or countervailing duties. Meanwhile, in Europe the United Kingdom and the European Union countries would lose their current quota arrangements.
With respect to tariffs the proposal also calls for expanding the range of downstream goods subject to Section 232 tariffs to disincentivize further production abroad. Fabricated structural steel and prestressed concrete strand are two of the examples given for such expanded coverage. In addition, the proposal would limit the exclusion process for steel imports. The proposal posits several possible means to do this, including restricting the timeframe for exclusion requests to a 60-day annual window and requiring greater certification of intended use by requestors.
While many of the tariff proposals above could likely be accomplished by executive action alone, the proposal also seeks a number of legislative actions. The first is changes in the antidumping and countervailing duty laws to allow more economic activities to be considered in setting rates, as well as allowing Commerce to streamline certain investigations In addition, the proposal supports a “pollution fee” on imported steel that seems very similar to the carbon taxes that were discussed here and here. Third, the proposal calls for several tax policy changes that incentivize domestic research and development and investment.
Finally, the proposal calls for several air quality and EPA regulations to be loosened to pre-Biden administration levels.
In evaluating whether the SMA is likely to have the administration’s attention, it is worth noting that President-elect Trump’s presumptive nominee as United States Trade Representative, Jamieson Greer, has represented U.S. Steel in private practice in the past. Thus, it is reasonable to expect that the group will at least receive a sympathetic reception in the administration. For instance, higher tariffs and changes to the AD/CVD laws have already been discussed by the President-elect and many in Congress. Similarly, the imposition of a carbon tax or pollution fee has been discussed for years.
While it is unclear what changes are coming to the international trade environment, it is clear that changes are coming. The attorneys at Barnes, Richardson & Colburn, LLP have been at the forefront of advising importers on ways to maximize benefit and minimize harm for over 100 years and are ready and able to assist you now.