Progress on the EU-US steel deal has been slow
European steelmakers are calling on the EU to resume negotiations with the United States on the Global Sustainable Steel and Aluminum Agreement (GSA), Euractiv reports .
The parties have committed to working on the deal in 2021. Washington first proposed creating a so-called green steel club in December 2022 to overcome the dispute over Section 232 import tariffs during the Trump administration. Progress has been slow and now Europe's steel producers are calling for more intense efforts.
According to Axel Eggert, General Director of the European Steel Association (EUROFER), negotiations should be resumed, based on what has already been discussed and possibly concluded. In a comment to the publication, he noted that the global overcapacity situation is deteriorating.
Steel production capacity far exceeds demand. The OECD (Organization for Economic Co-operation and Development) Steel Committee warns that the problem of excess capacity is likely to become even more acute in the future.
Meanwhile, Europe and the US are looking to launch a green transformation of the steel industry. The process requires large investments and cannot be economically justified unless sales of these products at higher prices are guaranteed.
The Green Steel Club can guarantee this condition, in particular, by creating obstacles for Chinese steel. However, analysts believe the details of the steel deal and the progress of negotiations are subject to change. Furthermore, the results of the upcoming presidential elections in the United States may affect the situation.
However, the biggest challenge may lie in the parties' different approaches to industrial transformation.
The United States wants to propose a tariff based on the carbon intensity of steel imported from other countries, but has so far left domestic production untouched. It is difficult to say whether an internal carbon price can be established.
Meanwhile, the European Union has set a price on CO 2 emissions from European steel production and has begun implementing a cross-border carbon adjustment mechanism (CBAM).
When it comes to carbon pricing, there are concerns on the other side of the Atlantic that if the United States can get several countries to join a green steel club that uses the European CBAM model, this could increase Brussels' influence. .
However, the US side is likely to reduce emissions following its own policy, says Mike Williams, senior fellow at the Center for American Progress (CAP). According to him, another proposal under development is the elimination or significant reduction of import tariffs on steel and aluminum sold within the hypothetical club.
As the GMK Center previously reported, at the end of December, the US extended the suspension of Section 232 tariffs for the EU for two years. It was also said that the parties would continue to discuss global agreements on steel and aluminum.
