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US Proposes Global Green Steel Club That Would Put Tariffs on China

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WASHINGTON — The Biden administration on Wednesday submitted a proposal to the European Union to create an international consortium to impose tariffs on steel and aluminum from China and others, while facilitating trade in low-carbon metals, according to a copy seen. sent. By The New York Times.

The document, a concept paper drafted by the Office of the U.S. Trade Representative, embodies for the first time a new type of trade agreement that the Biden administration sees as the cornerstone of its approach to trade policy.

The proposed group, known as the Global Agreement on Sustainable Steel and Aluminum, seeks to harness the power of American and European markets to strengthen domestic industries in ways that mitigate climate change. To do so, Member States jointly impose a series of tariffs on metals produced in environmentally harmful ways.

Tax collection targets China and other countries that are not part of the group. Participating countries will enjoy more favorable terms of trade, especially for cleaner-produced steel and aluminum.

To join the agreement, countries must ensure that their steel and aluminum industries meet certain emission standards, according to the document. Governments also need to commit to ending the overproduction of steel and aluminum, which is driving down global metal prices, and to restricting the activities of state-owned enterprises. Although China is not mentioned in the concept paper, it seems likely that these requirements will prevent China from joining.

The United States and the European Union are In talks about climate-related trade deals For the steel and aluminum industry since last year. US trade deals have never included specific targets on carbon emissions, and negotiators seek to align the US and her EU’s various economic approaches to mitigating climate change. had a lot of grounds.

It is unclear how the proposal, which is still in its early stages, will be received by European leaders, and whether US business and politicians will support the idea. An EU official on Wednesday declined to comment on details of the active negotiations, but said the two sides were discussing ways to continue and deepen work on the deal.

In recent weeks, trade tensions between the US and Europe have ascended to their highest level Since President Biden took office, leaders have battled over a US law aimed at boosting the production of electric vehicles in North America. European leaders say the measure puts their own industries at a disadvantage and are demanding changes that unfairly exclude European companies.

A senior trade official, who spoke on condition of anonymity because the papers have not yet been published, said the dispute over electric vehicles was unlikely to spill over into negotiations over steel and aluminium, saying the government had no plans for a deal. , which takes into account the carbon intensity.

After meeting with European officials outside Washington this week, U.S. Trade Representative Catherine Tai called the steel and aluminum deal “one of the most important things we’re doing between the U.S. and the EU on trade.” I called.she said it was “going well” to meet previous goal Scheduled for completion next year.

“This is about taking up some of the most difficult issues of our time, some of the things that have been really difficult among us, from Washington to Brussels, in terms of demonstrating what we can do. , is an important part of the track record we have.Thai said at a press conference on Monday that he will demonstrate leadership with a vision for the future.

European Trade Commissioner Valdis Dombrovskis said methods being developed by the US and Europe to measure the carbon footprint of steel and aluminum could be extended to other products. rice field. The government agreed to the launch.

“It will provide a common language for understanding many things,” he said.

It is also unclear how much support the plan will receive from domestic steel and aluminum producers. Some support a broader strategy, but business and union officials are still reviewing the plan, saying the potential impact on U.S. industry depends on details yet to be determined. there is


Things to consider before using anonymous sources. Do the sources know the information? What motivates them to tell us? Have they proven trustworthy in the past? Can the information be corroborated? Even if these questions are resolved, The Times will use anonymous sources as a last resort. The reporter and at least one of her editors know the identity of the source.

The US steel industry is already one of the cleanest industries in the world as a result of the country’s stricter environmental standards and efforts to recycle scrap metal. The agreement is intended to take advantage of these advantages and enable U.S. companies to compete with heavily subsidized steel and aluminum manufacturers in China and elsewhere.

But the United States is also home to many industries that purchase foreign steel and aluminum and process them into other products. They may object to the increased costs of moving.

If the US and Europe go ahead with this structure, there could be heated disputes over where to set tariffs and how to measure carbon emissions.

The development of methods to capture greenhouse gas emissions in the production of specific products is still in its early stages, and more data needs to be collected at the level of specific products and companies. said the plan.

Both the United States and Europe have expressed interest in expanding the consortium’s membership to countries that can meet its high standards. But if countries like Japan and South Korea are left out first, the deal could anger America’s allies in the short term.

The measure could also provoke retaliation from China or be challenged by the World Trade Organization, which requires members, including China, to treat each other equally in trade.

And it’s still unclear what legal authority the Biden administration will use to impose tariffs. A senior trade official said the Biden administration wants to involve Congress in formulating policy. But analysts speculate that the Trump administration could rely on the same national security-related executive branch that it used to impose tariffs on steel and aluminum.

While the proposal will please the administration’s supporters in labor unions and environmental advocacy groups, it will disappoint free trade advocates who hoped the Biden administration would reject the Trump administration’s more protectionist approach. Likely. Instead of removing the global levies on steel and aluminum that the Trump administration introduced in 2018, the effort is to bolster a new global tariff system framed around climate change concerns. will be replaced.

The concept paper proposes a tiered system of tariffs that rise according to the level of carbon emitted in the production of specific steel or aluminum products. Products from non-consortium countries are subject to additional tariffs.

Tariff rates for the cleanest products from member states start at 0. Furthermore, this paper does not specify the rate, instead expressing it as X, Y, or Z.

Proposals to impose tariffs on steel from China and other countries as part of the deal have previously reported by Bloomberg.

Tariff rates and consortium membership thresholds are designed to increase over time to encourage countries to continue cleaning up their industries. The deal will “encourage industry to decarbonise globally as a condition of market access,” the paper said.

Todd Tucker, director of industrial policy and trade at the Roosevelt Institute, compared this approach to “carbon tariffs imposed on countries outside the Carbon Club.”

The United States and the European Union appear to be seeking a “higher and more ambitious route” to deal with the global steel trade, Tucker said. It is to harness our power to drive decarbonization in the global steel market.”

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