The European Union Helps China Circumvent “Section 232” Steel Trade Action, New Report Shows

As U.S. and EU negotiators finalize talks over steel tariffs, action must be taken to address Europe’s own contribution to the global steel overcapacity problem

Washington, D.C. – New research from Horizon Advisory outlines in detail how China’s government is shipping large quantities of steel through the European Union in order to avoid “Section 232” tariffs imposed by the United States.

With U.S. and European Union negotiators in the final stages of talks over the tariffs, it’s more clear than ever that the two allies must work together to get tough on China — and that starts with the E.U. addressing some of its own unfair trade practices.

Alliance for American Manufacturing President Scott Paul said:

“This illuminating new report from the team at Horizon Advisory provides additional evidence that the United States must maintain effective trade action to ensure we can continue to produce steel and other critical materials we need for our national defense.  

“China’s government is determined to dominate the global steel market, including by maintaining massive overcapacity and dumping its steel products into the United States. Section 232 tariffs helped alleviate this pressure for American workers and producers, allowing our domestic industry to create new jobs and invest in facilities. Now China’s leaders are looking for work-arounds, including by funneling steel through the European market. U.S. leaders must take action to stop this plan. 

“But China isn’t the only problem; it’s time for the European Union to step up and join the United States to solve steel overcapacity once and for all. Not only does this include putting up a united front when it comes to China, it is also time for the EU to address its own unfair trade practices, including the heavy subsidies many member nations give to their steelmakers. Indeed, the U.S. already has initiated a number of trade cases against the EU because of steel dumping.  

“The Biden administration has admirably pledged to put forth a worker-centric trade policy. Now it’s time to put that pledge into action.  

“As U.S. and EU negotiators are in the intensive final stages of negotiations over Section 232, we should not settle for just any deal. Improved diplomatic ties with the EU cannot come at the expense of America’s workers. An agreement must include concrete action to ensure that China cannot launder its steel overcapacity through the EU market to circumvent 232 measures. Instead, the EU should join the U.S. in working toward an enforceable, global solution to the steel overcapacity crisis – and the U.S. should not remove Section 232 until that happens.” 

Read the full report, Footholds & Friction: China’s European Steel Front.