Exporters in the United Kingdom and the European Union are voicing frustration, claiming a new US tariff policy “makes a mockery” of their existing trade agreements. The US is considering adding 700 new products to a “steel derivatives” list, which would add new taxes on top of agreed-upon baseline rates.
The UK’s deal, for example, included a 10% baseline tariff on goods, while the EU’s was 25%. However, this new policy would impose an additional levy on the steel content of finished goods, like bicycles or baking pans. This “double-tax” threat has European industry leaders on high alert.
The push for these new tariffs is domestic, coming from US firms. Companies like Red Gold (canning) and Guardian Bikes (bicycles) have petitioned the Commerce Department, arguing they are at an “unfair” disadvantage.
They claim they pay high tariffs on raw steel, while they claim foreign competitors can import finished goods without a comparable tax. This “loophole” argument has been highly successful.
An earlier list of 407 items in August was approved with an almost 100% success rate. This has fueled the current, larger round of requests, which were submitted before an October 21 deadline.
Analysts at Flint Global note this “expansionist” policy is creating deep “uncertainty in the relationship” with European allies, despite the formal trade pacts. A decision on the 700 items is expected by January.