The US and EU have recently reached an agreement to end a three-year dispute over US tariffs on steel and aluminum imported from the EU. The US will replace the existing tariffs on EU steel and aluminum products under the so-called Section 232 with a tariff-rate quota (TRQ) system. Consequently, the EU will drop its retaliatory tariffs against US goods.
It was supposed to be a bilateral deal between the US and Europe with no other country involved. However, with its eyes fixed on China, the US government again chose to involve China, by allegedly addressing the "worldwide excess steel and aluminum capacity mainly centered in China." The move simply corrected previous trade restrictions in the US which obviously went against WTO rules. Now, Washington attempts to portray it as a joint move with the EU to deal with the "China challenge."
The steel industry in the US has seen a declining trend since the 1960s with shrinking size and employment. In 1967, the country became a net importer of the product. However, the steel industry and the United Steelworkers have a very important position and a strong influence in US politics. Yet, the forces of the economy cannot be reversed. The US has declined, from being a leader in the steel industry to just produce 4.7 percent of the world's steel in 2019, while importing 6.2 percent of the global output. Read more>>