May 1st 2018 – Following the announcement today of an extension to the EU exemption from US steel tariffs, UK Steel Director, Gareth Stace commented that the news will be greeted with ‘a certain sense of relief’ for steel producers in the UK. “A further extension to the EU exemption gives us a little more breathing room to continue discussions and find a way through the current impasse to reach a permanent agreement that works for all parties,” he said, adding that the extension of just 30 days ‘does not give us much time’.

Stace argued that all signs point towards a US insistence on the restriction of steel exports by its allies. “Such an outcome would be viewed in a dim light by many here; indeed for some it could have a greater impact than tariffs alone,” he said.

According to Stace, calls for the EU to place hard limits on its exports of steel are unjustified, against WTO rules, and run counter to the central tenets of free-trade. “It is only right that they have so far been rebuffed,” he said.

Stace believes that both tariffs and quotas would be negative all round. He claimed that US steel consumers are already reporting price increases and supply chain disruption.

Looking at the bigger picture, Stace said that tariffs can only lead to an escalation towards a global trade war ‘that is in no-one’s interests’.

“The only sustainable solution to the root cause of the issue, global overcapacity in steel production, is multilateral discussions and action through established international channels. This must continue apace,” said Stace. “Regardless of the ultimate outcome of EU and US discussions, it is vital that the EU forges ahead with its own safeguard action, to ensure domestic producers are not hit by an import surge resulting from millions of tonnes of steel diverted away from the US towards the EU in the months ahead.”

Source: Steel Times International