The U.S. and the European Union announced their commitment to negotiate the world’s first carbon-based sectoral arrangement on steel and aluminum trade by 2024. This announcement delivers a major win in the fight to address the climate crisis while protecting our workers and industry, and enabling them to compete in the global marketplace.
The U.S. and the European Union also used the strength of their partnership to come to an interim arrangement for trade in the steel and aluminum sectors that modifies tariffs on European Union steel and aluminum providers, addresses global overcapacity, and toughens enforcement mechanisms to prevent leakage of Chinese steel and aluminum into the U.S. market. As a result of the arrangement, the Europe Union will remove its tariffs on a wide range of products, protecting American jobs, reducing costs for middle-class families, and maintaining U.S. export competitiveness.
Together, the U.S. and European Union will work to restrict access to their markets for dirty steel and limit access to countries that dump steel in our markets, contributing to worldwide over-supply. This arrangement will be open to any interested country that wishes to join and meets criteria for restoring market orientation and reducing trade in high-carbon steel and aluminum products.
This arrangement will:
•Be a global first in the fight against climate change and countering distortive economic practices that harm our interests. Never have two global partners aligned their trade policies to confront the threats of climate change and global market distortions, ensuring that trade works to solve the challenges of the 21st century.
•Protect American jobs and industry and provide them with an advantage. American-made steel and aluminum is produced with far fewer emissions than dirtier alternatives made in the PRC and elsewhere. To date, American steel companies and workers have received no benefit for their low-carbon production. Low-carbon steel across all production types – and the workers who make it – will be incentivized and rewarded going forward.
•Results in lower prices for American consumers and families by providing relief for American manufacturers who rely on readily accessible, affordable steel and aluminum to make their products. Steel and aluminum are essential components of many manufactured goods, including automobiles, household appliances, building materials, and more.
•Steel and aluminum production are two of the most carbon-intensive industrial sectors, accounting for roughly 10 percent of all carbon emissions – comparable to the total emissions of India. A carbon-based sectoral arrangement will drive investment in green steel production in the U.S., Europe, and around the world, ensuring a competitive U.S. steel industry for decades to come.
Published in the December 2021 Edition