The signals the U.S. is sending in the steel sector really worry Germany, so said Brigitte Zypries, German Economy Minister, according to Reuters in a recent article.
This isn’t the first time the European Union has had a trade spat with the U.S. over steel but it is unusual for one party or the other to take the case to the World Trade Organization, claiming “accounting tricks” and “protectionism” designed to give domestic producers an “unfair competitive advantage.”
The E.U.’s position is this issue should have been addressed through bilateral negotiations giving them the opportunity to show Germany, French and Austrian steel producers are not dumping steel and are not being subsidized, but President Trump signed executive orders last Friday aimed at identifying abuses causing the huge U.S. trade deficit, and Germany is deemed one of the worst culprits.
However, by issuing a final finding that European and Asian producers dumped certain carbon and alloy steel cut-to-length plate in the U.S. market, the Department of Commerce says it is allowed to impose duties ranging from 3.62 to 148%, but the E.U. claims the decision has been determined on the basis of dodgy accounting estimates and the correct place to discuss them is at the negotiating table or via the WTO, not by applying duties which will then take months to address and impact trade for a year or more, essentially shutting European mills out of the U.S. market.
Rates vary by country and producer (see MetalMiner article linked above). For Austrian producers and exporters, dumping duties on the Voestalpine group and all others were set at 53.72%. For French manufacturers and exporters, duty rates were set at 148.02% for Industeel France and 8.62% for Dillinger France and all others. While in Germany, duties were set at 5.38% for AG der Dillinger Hüttenwerke, 22.90% for the Salzgitter Group and 21.03% for all other exporters and producers. Italian and Belgian producers were also caught up in the ruling but no mention was made of other European countries.
President Trump’s relationship with Europe got off to a rocky start during his election campaign when he demanded, not unreasonably, that NATO’s European partners pay more towards the organization’s collective defense efforts. That spat has been largely smoothed over and German Chancellor Angela Merkel committed to raising Germany’s contribution during a recent state visit, but the relationship remains strained and this latest trade spat will do nothing to improve Europeans’ view that the new administration’s America First policy means America First at the cost of its friends and trade partners.