WTO ruling re-ignites Section 232 saga
But will latest ruling have any impact on the USA steel market?
Trade protectionism found itself back in the news late 2022 when the World Trade Organisation (WTO) completed its examination of the USA’s Section 232 tariffs, imposed during President Trump’s tenure at the White House.
In 2018, Trump signed an order to impose new tariffs on steel and aluminium. The Section 232 tariff hit steel imports from a number of countries and regions, including Europe and China. With 35 million tonnes of steel imported into the US at the time, the move was significant – and condemned by EUROFER at the time.
According to the US Department of Commerce, the move was to counter the nation’s declining steel trade, which had seen six basic furnaces and four electric furnaces close since 2000, with employment down 35% since 1998.
It’s a no from the WTO
In 2022, the same year that the European Commission imposed significant anti-dumping duties on fasteners imported from China, the WTO ruled that the import duties brought in during 2018 contravened international law.
While steel importers no doubt welcomed the WTO ruling, the United States indicated it would not be making any changes in response, with the backing of the likes of the American Iron and Steel Institute (AISI).
“A WTO dispute panel has once again gone beyond its mandate,” blasted AISI President and CEO Kevin Dempsey. “Each member of the WTO has the right to determine what action it considers necessary to protect its own national security and today’s panel ruling disregards this central feature of the WTO system.
"New capital spending by US steelmakers, with investments of more than $22 billion in new, expanded or restarted production since March 2018."
“The Section 232 program on steel has worked to reduce the repeated surges in imports that threatened the health of the American steel industry. It also has incentivised new capital spending by US steelmakers, with investments of more than $22 billion in new, expanded or restarted production since March 2018. Unfortunately, the global steel overcapacity crisis continues to plague steelmakers worldwide, with excess capacity estimated to exceed 562 million metric tons in 2022, more than six times total steel production in the United States. And many countries continue to increase their steel capacity. For example, cross-border investments into Southeast Asia, including many incentivized through China’s Belt and Road Initiative, will add over 90 million metric tons of new, export-oriented steelmaking capacity in that region alone over the next few years. Given these facts, we believe the Section 232 measures on steel remain critically important for U.S. national security. AISI strongly urges the Biden administration to maintain the Section 232 program in steel and disregard this erroneous decision.”
Individual companies also weighed in, with Nucor – manufacturer of steel and steel products, including steel bar and fasteners – among those firmly backing the US government for ignoring this latest WTO ruling.