Supply chain relief by way of partial lift of steel and aluminum tariffs

Metal fabricators could be the beneficiaries of the White House’s decision to ease steel and aluminum tariffs on the European Union, but a key steel users group is not really happy with what they consider a half-step measure. Gerry Images

A key U.S. steel users group voiced mixed feelings about the new U.S.-European Union agreement partially lifting 25% import tariffs on steel and 10% import tariffs on imported aluminum from European countries. The agreement has a dual purpose: easing supply chain problems for a broad cross section of U.S. manufacturers who use steel and tamping down cheap Chinese steel slithering into the U.S. through Europe.

Additionally, follow-on tariff rate quota agreements appear to be in the works with the United Kingdom and Japan, based on two, parallel U.S Department of Commerce statements on Oct. 31. The statements said: “The United States and the [United Kingdom or Japan, depending on the statement] are consulting closely on bilateral and multilateral issues related to steel and aluminum, with a focus on the impacts of overcapacity on the global steel and aluminum markets; the need for like-minded countries to take collective action to address the root causes of the problem; and the climate impacts of the sectors.”

The Biden administration will eliminate tariffs on 3.3 million metric tons of imported European steel, which is the average of those imports between 2015 and 2017. Imports above that level will continue to be subject to duties of 25%. To be eligible for duty-free treatment under the quota, 54 product categories of steel imports must be “melted and poured” in the EU. Manufacturers that won exclusions to import duties in the past will have those exclusions extended to Dec. 31, 2023. Those totals will not be counted against the 3.3-million-ton ceiling.

Aluminum imports allowed in tariff-free amount to 18,000 metric tons for unwrought aluminum under two product categories and 366,000 metric tons for semifinished (wrought) aluminum under 14 product categories. Derivative articles of aluminum are exempt. The U.S. will maintain its aluminum product exclusion process.

The Coalition of American Metal Manufacturers and Users (CAMMU) called the agreement good news, but said, “It is disappointing that the agreement will not completely terminate these unnecessary trade restrictions on our allies. CAMMU is concerned that replacing the tariffs with a tariff rate quota will hurt its members because the threat of tariff reinstatement looms with the surge in steel and aluminum demand expected when the bipartisan infrastructure bill passes.”

The somewhat conflicted view of users parallels the hitches in the view of steel manufacturers expressed by the American Iron and Steel Institute (AISI). Kevin Dempsey, AISI president/CEO, appreciated the Biden administration’s “commitment to addressing the global steel overcapacity crisis and to combatting unfair trade practices in the global steel sector.” But he went on to stress the importance of proper enforcement of the agreement particularly with regard to preventing seepage of cheap Chinese steel into the U.S. through Europe and the need for “new trade approaches to address climate change, including through development of effective carbon border adjustment measures.”

U.S. steel production, which relies heavily on electric-arc furnaces, is regarded as having far lower carbon emissions than the coal-fueled blast furnaces prevalent in China.

Widespread Industry Support for Updated Mechanical Power Press Safety Standard

Industry is showing widespread support for the Occupational Safety and Health Administration (OSHA) to update its current mechanical power press standard with ANSI B11.1-2009 (R2020).

The agency issued a request for information on July 28. The OSHA standard includes requirements for inspecting, maintaining, and modifying mechanical power presses to ensure that they are operating safely as well as a special reporting requirement for injuries to employees operating mechanical power presses. The standard also includes requirements for safeguarding the point of operation.

The Precision Metalforming Association (PMA) told the OSHA the latest ANSI B11.1 standard, which is comprehensive and proven effective, also includes requirements for increasingly popular servo presses and requirements for the composite press production system, including automation.

That said, the Industrial Fasteners Institute wants the OSHA to grandfather older mechanical presses that comply with the 1971 standard. “Older machines may be perfectly safe and functioning properly, but since their wiring was done before the current ANSI standard was issued, then it would be unreasonable to expect a costly, unnecessary upgrade,” the organization said in a statement.