Concern over steel tariffs continues to grow for metal fabrication industries

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Manufacturers who depend on certain types of specialty steels, such as stainless steel, want tariff exclusions applied to these types of imports. The federal government has not been very accommodating. PhonlamaiPhoto/Getty Images

The United States’ third Tariff Rate Quota (TRQ) agreement, this time with the United Kingdom (UK), was supposed to make US metal users happy to be able to source foreign steel and aluminum without having to to pay the additional costs of import tariffs. But this new TC, announced on March 22, like the second with Japan (not covering aluminium) in February, and the first with the European Union (EU) announced last December, only managed to cause more dissatisfaction because they do nothing to alleviate supply chain issues.

While admitting that the TRQ could help some American metal manufacturers who continue to have long delivery delays and pay the highest prices in the world, the Coalition of American Metal Manufacturers and Users (CAMMU) complained: “However, it is disappointing that the deal is not a complete end to these unnecessary trade restrictions on one of this country’s closest allies, the UK. As we already see with the tariff quota agreement between the United States and the EU, where certain quotas for steel products were filled for the year during the first two weeks of January, this type of government restriction on raw materials and intervention leads to market manipulation and plays on the system which further disadvantages the smallest manufacturers in this country.

The tariff “game” also applies to the difficult exclusion process where domestic steelmakers unfairly block the issuance of tariff exclusions requested by U.S. manufacturers of food processing equipment, automobiles, appliances and other products that suffer from high prices and supply chain issues. . The U.S. Department of Commerce’s Bureau of Industry and Security (BIS) is currently conducting its sixth review of this debarment process.

“NAFEM members, like other U.S. manufacturers using steel and aluminum, continue to experience high prices on necessary inputs, limited or, in some cases, denied supplies of critical raw materials, increasing supply chain challenges and long delivery delays,” said Charlie Souhrada. , vice president, regulatory and technical affairs, North American Association of Food Equipment Manufacturers.

Donald Trump imposed the steel and aluminum tariffs in 2018 because of national security tariffs. But as President Joe Biden’s administration attempts to bolster US defense relations with the EU, Japan and Britain in the face of Russia’s invasion of Ukraine, some political pundits are wondering if t is slightly counter-intuitive to maintain steel tariffs on these same countries.

Paul Nathanson, a CAMMU spokesman, called the national security tariffs on the EU, UK and Japan “ridiculous” following the Russian onslaught.

Effective June 1, the U.S.-British TRQ sets a steel import volume at 500,000 metric tons for 54 product categories and allocated in accordance with the historical period 2018-2019. The annual volume of aluminum is 900 metric tons for raw aluminum under two product categories and 11,400 metric tons for semi-finished (forged) aluminum under 12 product categories.

These TRQ agreements still impose the 25% duty on steel imports and the 10% duty on aluminum imports from the EU, UK and Japan. Given the supply chain issues, Commerce’s issuance of tariff exclusions — more likely its failure to do so quickly — is increasingly contentious.

For example, Bobrick Washroom Equipment, which manufactures stainless steel dispensers, disposal cabinets and grab bars in Jackson, Tennessee; Durant, Okla.; Clifton Park, New York; and the Toronto plants, argued: “Currently, the exclusion process relies on self-serving representations from domestic stainless steel suppliers about the hypothetical availability of various types and forms of stainless steel.” In comments to BIS, Bobrick said suppliers have “manipulated the national stainless steel supply by closing factories and consolidating the industry. Finally, domestic suppliers placed their customers on harsh allocations, successfully limiting supply and raising prices by more than 50%. »

Magellan Corp. in Deerfield, Ill., which sources, sells and distributes specialty steels and other metal products, said: veto applications. Magellan wants the BIS to establish a central database, which includes detailed information about specific past exclusion requests so that an importer does not have to gather this information themselves.

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