USA addresses import duties on steel and aluminum

The United States said Friday it would start talks with Japan that could lead to easing tariffs on steel and aluminum imports, which have long been a nuisance in trade relations between the two allies.

The US Department of Commerce and the US Trade Representative's Office said the talks were aimed at eliminating global overcapacity in steel and aluminum, restoring market-oriented conditions and preserving critical industries.

Talks with Japan follow an agreement between the United States and the European Union to end a dispute over steel and aluminum tariffs and to develop a global deal to combat "dirty" manufacturing and overcapacity in the industry.

The future agreement, which is open to other countries, will challenge China, which produces more than half of the world's steel and which the EU and the United States accuse of creating overcapacity that harms their own industries.

Last year, the Global Forum on Steel Excess Capacity estimated the gap between global steelmaking capacity and global demand at nearly 600 million tons, a figure that will continue to grow given the new capacity already planned or under construction.

Japan last week called on the United States to lift Section 232 tariffs imposed by the administration of former US President Donald Trump in 2018.

Friday's announcement comes ahead of Secretary of Commerce Gina Raimondo and U.S. Trade Representative Katherine Tai's separate visits to Japan starting next week.

The United States stated that the two countries will seek to address concerns about Section 232 tariffs and the adequacy of measures to address overcapacity in steel and aluminum, with the aim of finding mutually beneficial and effective measures to restore market-oriented conditions to take.

"The time has come," said Myron Brilliant, director of international affairs at the US Chamber of Commerce. "The process of tariff elimination needs to be carried out with Japan, Korea and the UK. We are very encouraged by all the signals that the government is seeking this."

Tai will also visit South Korea this month, but sources said they weren't expecting a similar announcement there.

The US-EU deal ended a simmering dispute over US tariffs on steel and aluminum imposed by Trump and prevented EU retaliatory tariffs from rising.

The agreement maintains Section 232 tariffs of 25% on steel and 10% on aluminum, but allows duty-free imports of limited quantities of EU-produced metals into the United States.

Accordingly, EU steel and aluminum must be manufactured entirely in the EU - a standard known as "melted and poured" - in order to be imported duty-free. The purpose of this provision is to prevent metals from China and non-EU countries from undergoing minimal processing in Europe before being exported to the United States.

As part of the deal, Europe agreed to forego retaliatory tariffs on US products, a move that Raimondo said would lower costs for US steel-consuming manufacturers.

The Japanese steel industry fears that the US-EU deal will lead to a major relaxation of measures for certain countries and regions, said Eiji Hashimoto, chairman of Japan's Iron and Steel Association, last week.