On 16th May the European Commission published Regulation 2018/724 enabling it to apply retaliatory tariffs in the event the United States fails to grant permanent exemption from President Trump’s tariffs on steel and aluminium. Included in the list of products potentially subject to 25% EU safeguard tariffs at short notice are seven ranges of fasteners.
The European Union has already made it clear it considers US tariffs on steel and aluminium as safeguarding measures, not security measures as President Trump has argued. Critically, under WTO Rules, this interpretation entitles an exporting member affected by safeguarding measures to suspend equivalent concessions and trade obligations. The new regulation reinforces the EU’s position in this regard and provides for it to apply 25% retaliatory tariffs on an extensive range of products imported from the United States. The regulation includes an initial list of products that may be targeted immediately if the EU and US are unable to reach agreement on a permanent exemption.
Annex I confirms seven fastener related tariff codes could be subject to 25% tariffs at short notice. They are:
7318 1410 stainless steel self tapping screws
7318 1491 space threaded screws
7318 1499 other self tapping screws
7318 1640 blind rivet nuts
7318 1660 self locking nuts
7318 1692 nuts <12mm
7318 1699 nuts >12mm
A second schedule of products could see similar level tariffs applied after three years, or earlier if/when a WTO Dispute Body ruled against the US tariffs.
The temporary exemption granted to the EU from the US steel and aluminium tariffs expires on 1st June unless agreement is reached in the meantime. EU heads of government have approved a potential trade offer to the US in exchange for permanent exemption of the steel/aluminium tariffs. The offer includes a trade deal on industrial tariffs, including cars and public procurement; voluntary regulatory cooperation on an ad-hoc basis; purchasing more American liquefied natural gas; and a joint approach to reform the World Trade Organization.
However, EU Trade Commissioner, Cecilia Malmstrom, has already told a press conference Washington did not appear satisfied with the proposal. The Trump administration appears to be holding out for quotas on steel/aluminium imports from the EU, similar to those it has successfully agreed with Australia, Argentina, Brazil and South Korea in exchange for a permanent tariff exemption. Commissioner Malmstrom said she could not conceive of the EU accepting quotas unless they were at the levels of exports in recent years.
German Economy Minister, Peter Altmaier, is also reported to have expressed uncertainty over whether a permanent exemption was achievable but said there would be close and intensive contact with the US during the remainder of May to seek a solution. On Wednesday (23rd May), however, The US Department of Commerce confirmed it has initiated a Section 232 investigation on vehicle and parts imports that could lead to the imposition of similar ‘security’ tariffs. Around 11% of cars imported to the United States emanate from the EU and the US is the second largest export destination for major German car brands, involving some 500,000 vehicles.
Having held senior management roles in leading automotive and fastener businesses, Phil joined Fastener + Fixing Magazine as editor in 2002. Convinced there is no substitute for ‘being there’, over 17 years of visits and interviews around the world means he has accumulated an extraordinary knowledge and perspective of the global fastener industry, reflected in his incisive and thought provoking reporting.
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