U.S.-E.U. Steel Tariff War Leaves India Worried
The Steel Ministry expressed concern at the retaliatory safeguard measures on steel imports imposed by the European Commission following similar trade curbs that were announced by the U.S.
The safeguards are of greater concern to India than the U.S., Aruna Sharma, secretary at the Ministry of Steel, told BloombergQuint on the sidelines of an event in Delhi yesterday. This comes ahead of the U.S.' 25 percent import duty on steel imports that will kick in from Aug. 4. “Nearly 6 percent of our steel exports are to the E.U., especially Italy. Therefore, it is important for us and we're watching.”
Sharma said there will be a hearing on the safeguards on September 14. “We have put forth our objections because they’ve come up with a blanket order for which discussions are on. Let’s see.”
The measures announced by the European Commission—the executive arm of the E.U.—came into effect on Jul. 19 and pertain to 23 categories of steel. It'll take the form of a tariff rate quota. A press statement by the European Commission said a 25 percent tariff will be imposed in each category once imports exceed the average of imports over the last three years. The commission has specified a limit for duty-free imports of specific steel products, beyond which they would attract an average duty of about 25 percent.
“We’ve opposed the three-year principle for averaging imports that the U.S. is reconsidering. We can also put the same case to the E.U,” Sharma said on the remedies at hand. “We want averaging of 2016 and 2017 only as 2015 wasn’t a good year for the steel sector. There is no case in the E.U. against India because we have a niche market there and we’ll be competing in it.”
According to a recent report by Reuters, the main steel exporters to the E.U are:
- South Korea.
India is ranked 10th among the major steel exporting countries with total exports at 16.3 million tonnes, according to World Steel Association’s figures for 2018. The E.U.’s 41.2 MT of steel imports was the highest in 2017.
“The modalities of the duty structure is universal, but it should be country-specific,” Anand Seth, spokesperson for Engineering Export Promotions Council, told BloombergQuint over phone. “Developing countries such as India will have zero-duty benefit, so they'll lose the competitive edge. The Indian government should take a holistic view of overall exports from India while discussing with E.U.”
Sharma said there’s no immediate effect of the U.S. tariffs on India. India exports 10 percent of the steel that it produces, she said, adding: “Last year, our capacity was 134 MT, production was 102 MT and exports were 10 MT. In absolute numbers, we’d exported less than 0.9 MT, or less than 1 percent, of our total domestic production to the U.S.”