EU Trade Chief Says Talks Continue to End 25% Tariffs on Steel and Derivatives
The chief negotiator for the European Union, Maros Sefcovic, said that while the EU has a reputation for having "very complicated rules and regulations," that doesn't compare to the burden on companies trying to quantify how much steel (and its cost at the time it was sourced) went into making a Bosch refrigerator, Miele dishwasher or a BMW motorcycle.
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Sefcovic, who was speaking at an Atlantic Council forum Sept. 30 in Brussels, said he had a late-night phone call with Commerce Secretary Howard Lutnick hours before this appearance, specifically on Section 232 tariffs on steel and steel derivatives.
The EU is asking the U.S. to grant tariff rate quotas for exported steel "with very low or zero tariffs, because our steel business is actually quite complementary." He said the EU exports about 4 million tons of steel annually to the U.S., and about 1 million tons' worth of steel derivative products.
"I think we concluded very early on in our negotiations in early spring that, if it comes to the steel exports, we are not each other's problems," he said. "But we have the same problem, and the problem is that our markets for a long time have been simply too open, and the global overcapacity of the steel production just grew by unprecedented pace."
Sefcovic said that 35 million tons' worth of steel production in the EU shut down in just the last three years, an accelerating pace of losses, since a total of 35 million tons' worth of steel production was shuttered during 2015-2022.
He said that the EU will be proposing tariff rate quotas for steel exporters to the EU, as a safeguard to protect its own steel industry.
The moderator pressed Sefcovic on whether the EU had really gotten stability in its trade relationship with the U.S., given continued pressure from the U.S. government on EU digital policies, and the ever-expanding list of products that could be hit with higher tariffs under Section 232.
The trade commissioner asserted that the EU "got the best possible deal," and that the EU is "following it to the dot."
As to the concerns, he responded: "What was the alternative? Would we be better off with a full-scale trade war with the United States of America or with tariffs somewhere between 30 [percent] to 50 percent? Our projection has been quite clear, and this is what we shared with our American colleagues on all levels: if the tariffs are over 30 percent, our trade is more or less halted with all the repercussions for this: six million jobs on both sides of the Atlantic -- in the U.S., in the EU."
He said reaching a deal was the only responsible choice.
Moreover, Sefcovic argued, the deal is showing its worth, as any company that hasn't expanded manufacturing in the U.S. enough to avoid 100% pharmaceutical duties will only face 15% duties.
He also pointed out that 1.2 billion euros that were paid on car imports from the EU in August and September will be refunded as a result of the deal.
An audience member asked the trade commissioner if the EU and the U.S. could ever seal a comprehensive trade agreement, as the EU has done with more than 70 countries.
He replied that U.S. politicians believe that the earlier trade system was not fair to the U.S., and that the U.S. and the EU are going through "this very elaborate, and sometimes very, very painful, process," but that both parties believe that they should aim for a trade agreement.
"How ambitious, how detailed, and what sectors you would cover, it’s for later," he said.
He also was asked what would happen to the framework agreement if the Supreme Court strikes down tariffs imposed under the International Emergency Economic Powers Act, which include 15% all-inclusive tariffs on European exports. He didn't directly answer, instead, saying, "I’m sure that it would be up to the U.S. partners to see how they would adjust their policies."