US push for hefty steel import duties draws tit-for-tat threats

Published on : July 03, 2017 Topic : Global Trade
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Geneva: As the Donald Trump administration reportedly considers imposing hefty duties on imports of steel and aluminium products, Russia, the European Union (EU), China, Brazil, Australia, Taipei and Japan, among others, have warned Washington of a tit-for-tat response at the World Trade Organization (WTO), according to trade envoys familiar with the development.

Members told the US at a meeting of the WTO Goods Council on Friday that the proposed move against leading exporting countries under the US Section 232 investigations that determine the effect of imports on the national security will not only have grave “systemic” consequences but will alAccording to a report in Axios, an American news and information website, US President Donald Trump is considering slapping a 20% tariff on imports of steel and possibly a number of other goods. The report suggested that the President is on the verge of taking the decision to impose duties on steel and aluminium products because of the security threat they posed to the US.

The US says steel and aluminium serve the US national security industrial base and the continued imports of these two items “threaten to impair national security.”

In a sharp criticism of the proposed US measures at the Goods Council meeting, Russia asked the US to stop resorting to unjustifiable trade-restrictive measures. Russia said the proposed additional duties will adversely affect its exporters. Russia is the fifth largest exporter of iron and steel production and the third largest exporter of aluminium products to the American market.

The European Union told the US that the existing security exceptions permitted under Article XXI of the General Agreement on Tariffs and Trade (GATT) cannot be applied to the specific issues and circumstances raised in the US context. The WTO rules allow only anti-dumping and countervailing (anti-subsidy) duties but not trade restrictive measures under security exceptions of Article XXI of GATT, the European Union said, according to people present at the meeting.

The EU also maintained that it will be the first major victim of the US action more than China which is already facing numerous anti-dumping and anti-subsidy actions in the American market. More disturbingly, the Section 232 investigations and outcomes by the US will lead to “unacceptable systemic risks”. The EU said it will take appropriate “necessary actions” if the American import restrictions are applied to steel and aluminium imports from European countries.so result in retaliatory action, according to trade envoys present at the meeting.

Brazil, Australia, and Taipei supported the EU saying it will unleash “systemic risks” in the global trading system. International trade rules should be upheld to face the global challenge posed by the US, Australia said.

China also said the Section 232 investigations/outcomes were inconsistent with GATT Article XXI as imports of steel and aluminium were not a threat to national security. The US must not create trade barriers under the pretext of national security consideration.

India said it is watching the situation arising from the Section 232 investigations as it could affect the export of semiconductors and software from India, an Indian official said after the meeting.

But the US stuck to its position saying its secretary of commerce has initiated the Section 232 investigations in the light of the critical role played by steel and aluminium in the US national security industrial base and the continued increase in their imports.

The commerce secretary recommends actions to “adjust the imports of steel and aluminium” if he finds that they are imported into the US “in such quantities or in such circumstances as to threaten to impair national security,” the US said, according to people familiar with the development.

Source: Livemint
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