US Steel and Aluminium Tariffs — House of Commons, 2018-06-04
Topic: Foreign Trade
Liam Fox (Conservative, Centre-right): With permission, Mr Speaker, I will make a statement on the United States’s imposition of steel and aluminium import tariffs On Thursday 31 May, President Trump announced that the United States would impose tariffs of 25% on steel imports and a 10% tariff on aluminium imports from the European Union. Canada and Mexico, with which the United States is renegotiating the North American Free Trade Agreement, will be subject to the same tariffs. Although Argentina, Brazil and South Korea have avoided tariffs, those countries agreed to lower exports to the US. The indications are that US imports from those countries will be restricted, in some instances involving quarterly quotas For products within the scope of these tariffs, in 2017 the US accounted for 7% of UK steel exports and 3% of UK aluminium exports. Put another way, the UK accounted for 1% of US steel imports and 0.1% of US aluminium imports by tonnage, at a value of £360 million and £29 million respectively We are deeply disappointed that the United States has taken this unjustified decision, particularly on grounds of national security. We share a strong defence and security co-operation relationship. As close allies in NATO, permanent members of the UN Security Council and nuclear powers, close co-operation between the UK and US is vital to international peace and security, and other EU states are also key players in transatlantic security co-operation As I said the previous time I addressed the House on this issue, these unilateral trade measures have weak foundations indeed in international law, and they are not consistent with the US Department of Defence’s own judgment in an investigation that was conducted on the basis of national security. We believe that the EU should have been permanently and fully exempted from the unjustified measures on steel and aluminium. We will continue to make this case at the highest level, in concert with the EU. Our priorities now are to defend the rules-based international trading system, which supports growth, consumers and industry; to ensure that this does not escalate and risk further undermining world trade; and, most importantly, to protect the interests of British industry The use of national defence as the rationale for this action threatens to create a worrying global precedent. We are clear that these unjustified additional tariffs could harm consumers, hold back growth and, ultimately, damage industry by driving up the price of inputs and production, and diminish global competitiveness. We remain of the view that issues of global overcapacity in the steel market are best solved through international collaboration, not unilateral action. The UK has worked hard to address the issue of overcapacity. The Prime Minister called for a forum of G20 members to tackle this issue, and the UK will continue to work within the rules-based international trade system to tackle this problem through the G20 steel forum However, as the US has decided to impose these tariffs, which will damage the steel and aluminium industries in Europe, we must respond. As a member of the European Union, we will continue to work with the European Commission and member states on the EU response. That is focused on three areas. First, the European Commission is preparing to introduce immediate duties on the US, ahead of a World Trade Organisation dispute. Following a unanimous decision by member states, the EU notified the WTO of a potential list of product lines on 18 May and could trigger tariffs on this list from 20 June. The Commission is required to seek member state approval a second time in order for any of the countermeasures to come into effect. Specific timings are yet to be determined by the Commission Secondly, the EU can apply safeguard measures to protect the steel and aluminium industries from being damaged by an influx of imports to the EU caused by the displacing effect of US tariffs. The EU is finalising an ongoing investigation launched on 26 March into potential EU-level safeguard measures to protect its own steel market from trade diversion resulting from US measures. Provisional measures could be adopted as early as mid-July. The EU has also introduced surveillance of aluminium imports to determine whether an aluminium safeguard investigation is justified. We will support any safeguard measures required to deal with steel diversion as a result of these tariffs Thirdly, the EU can pursue a dispute at the WTO, and it filed such a dispute, challenging US steel and aluminium tariffs, last Friday. It is right to seek to defend our domestic industries from both the direct and indirect impacts of these US tariffs. The response must be measured and proportionate, and it is important that the United Kingdom and the EU work within the boundaries of the rules-based international trading system. Since the President asked the Department of Commerce to launch the investigations into the national security impact of steel and aluminium imports last April, the Government have made clear on repeated occasions to the Administration the potentially damaging impact of tariffs on the UK and EU steel and aluminium industries. The Prime Minister has also raised her concerns with President Trump. I have spoken on multiple occasions to the Commerce Secretary and US trade representative about the investigation, to the director general of the WTO, Roberto Azevêdo, to the EU Trade Commissioner, Cecilia Malmström, as well as to my colleagues in member states. The Government have worked closely with the EU as part of our unified response. In addition, I assure the House that we have been in regular contact with the UK’s steel and aluminium industries throughout, and the Secretary of State for Business, Energy and Industrial Strategy has convened a steel council, which will take place shortly. I have been in touch with UK Steel throughout, most recently at a meeting in Westminster earlier today We remain committed to robustly defending and protecting the UK’s steel and aluminium industries and their employees. The Government will continue to press the US for an EU-wide exemption from these unjustified tariffs. In parallel, UK suppliers will want to encourage their US customers to seek product exemptions via the process that is being overseen by the US Department of Commerce. Tomorrow morning, the Department for Business, Energy and Industrial Strategy will host a meeting with the industry to share information and advice on the product-exemptions process. UK firms without a presence in the US cannot apply directly for a product exemption, which means that UK firms will need to work with their products’ end users in the US to apply for a product exemption and to gather the relevant data and justification for such an exemption. The Government will support applications made on the behalf of UK industry with representations to the Department of Commerce to process applications for product exemptions as promptly as possible. My Department published an information note on the procedure on gov.uk on Friday The Government are committed to free and fair trade, and to the international rules that underpin both. We will seek to promote and protect those rules alongside the interests of British industry. I commend this statement to the House.