US steelmakers propose to impose import surcharges on carbon-intensive steel

Discussions focus on protection against imports and global overcapacity

Discussions about the future of the US steel industry and green steel are dominated by the industry’s longstanding struggle to protect itself from imports and global overcapacity. E&E News writes about this.

Thus, steel companies support the adoption of the Leveling the Playing Field 2.0 Act. This bipartisan bill would allow the Commerce Department to impose tariffs on governments that subsidize businesses in third countries. Currently, this document is stalled in both houses of Congress.

According to the American Iron and Steel Institute (AISI), in 2023, the United States produced 89.7 million tons of steel and imported 28.2 million tons. Foreign supplies account for more than a fifth of steel consumption in the United States. China and India directly export only a small amount of steel products to the U.S. market, but representatives of the steel industry note that Mexico is the main transshipment center for foreign steel.

The US and the EU are currently negotiating a green steel club. At the end of last year, the parties resumed the mutual suspension of tariffs imposed during the Trump administration. However, some observers say that the discussions, initially aimed at establishing a global standard for low-emission steel trade, are unlikely to yield significant results due to ongoing disagreements.

Inu Manak, a trade policy fellow at the Council on Foreign Relations, noted that the Biden administration prioritizes market access for U.S. companies over increasing trade in low-carbon steel.

«If you look at the American and European steel industries, they are already quite green. But they could be more decarbonized,» she said.

Currently, American lawmakers are uniting around a law called the PROVE IT Act. It was passed by the Senate Committee on Environment and Public Works in January this year. The bill requires the Department of Energy to study and determine the emissions intensity of nearly two dozen products made in the United States, including steel, compared to products made in other countries.

Some conservative groups have criticized it as a launching pad for a carbon tax, although experts say it is aimed at limiting imports from China and India.

U.S. steel producers support this approach.

“Countries and companies that produce dirty, high emission steel should pay a premium if they cannot meet the emission levels of domestic steel producers. There should be a surcharge, and things like the PROVE IT Act will help set the stage for that,” said Philip Bell, president of the American Steel Manufacturers Association (SMA).

The future of the PROVE IT Act is uncertain, but its supporters expect the bill to grow in popularity even if Donald Trump wins the upcoming US presidential election. This is because it will be in line with Trump’s protectionist stance and his tough trade stance towards China.

As GMK Center reported earlier, groups representing US steelmakers have called for legislation in 2024 to support domestic demand and limit imports of carbon-intensive steel from countries such as China.