European exporters are warning that a new wave of 700 US tariffs “makes a mockery” of their existing trade agreements. The US Commerce Department is poised to approve a new “steel derivatives” list, which would stack new levies on top of the baseline rates the UK and EU already pay.
The UK’s deal set a 10% baseline tariff, and the EU’s 25%. This new, “additive” tariff would tax the steel content of finished goods in addition to that baseline, creating a “double-tax” scenario for products like bicycles, baking pans, and industrial machinery.
The push for these tariffs is domestic. American firms, claiming “unfair” competition, have petitioned the government. They argue they pay tariffs on raw steel, while foreign competitors can import finished, steel-containing goods at a lower rate.
This “loophole” argument has been highly successful. An August list of 407 items was approved with an almost 100% success rate. This precedent has fueled the new, larger round of requests, which were submitted before an October 21 deadline.
Experts like George Riddell of Flint Global call this an “expansionist” policy. He notes the US has taken a “very liberal” approach to approvals, with “almost zero” rejections.
A decision on the 700 new items is expected in December or January. This has created deep “uncertainty in the relationship” with allies, who now see their trade pacts as offering little protection.