Trump unites steel-exporting countries against the US

Trump unites steel-exporting countries against the US

Trump unites steel-exporting countries against the US

Opposition to the steel and aluminum tariffs that U.S. President Donald Trump put into effect in March is mounting.

India, the world's 10th largest steel exporter in value terms, is considering countermeasures, including the possibility of challenging the U.S. at the World Trade Organization. Thailand, meanwhile, has asked Washington to exempt it from the tariffs, while a Russian company is taking the matter to court -- in the U.S.

Meanwhile, some U.S. trading partners feel further victimized by not being included on a list of nations exempted from the tariffs.

The U.S. said it would impose a 25% tariff on steel and a 10% levy on aluminum. The announcement was roundly criticized as running counter to WTO rules, but Washington went ahead and introduced the levies on March 23.

"We are within our complete competence and power to ... protect India's commercial interests, including [through] the provisions of WTO," Suresh Prabhu, India's commerce and industry minister told in a recent interview with the Nikkei Asian Review.

India's steel exports totaled $14.6 billion, and its aluminum exports came to $3.2 billion in the 12 months through March 2017. In each case, 11% went to the U.S.
The new tariffs are expected to have a big impact on India.

"Whatever is possible," Prabhu said, "we will do it."

In early April, Thai negotiators in Washington asked the U.S. to exempt it from the tariffs, Nuntawan Sakuntanaga, permanent secretary of the Ministry of Commerce, told the Bangkok Post. They argued that Thailand's steel and aluminum exports account for slivers of the U.S. market. They also noted that Bangkok has taken measures to ensure steel and aluminum from third nations is not exported to the U.S. through Thailand, thus masking their country of origin.

Washington has decided to exempt South Korea, Argentina, Brazil and Australia. In each case, the exemption came after bilateral negotiations. Such talks are still underway with Canada, Mexico and the European Union, which are temporarily exempted from the additional tariffs.

According to U.S. trade statistics, America in 2017 imported 34.4 million tons of steel, worth $29.1 billion. About 65% of these imports, both in terms of volume and value, are exempted from Trump's tariffs.

China appears to be Trump's biggest target, even though it accounted for 3% of U.S. steel imports last year. Other countries are also in the cross hairs.

Russia is among them. The country's Industry and Trade Ministry estimates losses stemming from Trump's protectionism of at least $2 billion for steel and $1 billion for aluminum.

Moscow is now considering WTO-based countermeasures. It might demand a reduction in U.S. tariffs on other Russian products, according to the RIA news agency.

A U.S. subsidiary of Russian steelmaking giant Severstal filed a lawsuit with the U.S. Court of International Trade, demanding Washington halt the tariffs. Rusal, a major Russian aluminum maker, asserts its exports go to industries that are suffering through aluminum shortages and therefore pose no threat to U.S. producers.

The EU, which is exempted from the U.S. tariffs until June 1, has also criticized the U.S. measures. "The EU should be fully and permanently exempted from these measures," the European Commission said in a statement on May 1, "as they cannot be justified on the grounds of national security."

The Trump administration argues that the U.S. cannot afford to lose steelmaking capacity if it wants to keep its defense makers secure.

As for China, in early April it filed a complaint with the WTO regarding U.S. tariffs on certain Chinese products.

Other parties are have been asking to join the China-requested consultations. India, Thailand, Russia, the EU and Hong Kong have so far officially applied to do so.

"The measures at issue identified in the request for consultations [by China] may substantially affect Thailand's sales and exports of these products," the Thai government wrote in its request to join China's complaint. The request was submitted on April 18.

Other parties have used similar language in their requests.

The U.S. and China have to agree to allow other parties to join the consultations.

If they are allowed to join, it would be as third parties, and their participation would not affect the nature of the bilateral dispute.

Junko Suetomi of the law firm Baker & McKenzie is considered an expert on trade dispute resolutions. She said the parties to the dispute have the power to determine how other countries can participate, including opportunities to speak and how long they can sit in on the sessions.

The moves to join China's complaint are partly aimed at checking Washington. According to an Indian government source, the U.S. has accepted participation of India and the EU on April 19. The fate of other parties requesting to join the consultations remains uncertain.

Countries that are unable to join the China-requested dispute-settlement procedure may file their own WTO complaints.
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