Ukrainian metallurgists urge Zelenskiy to protect their exports from 25% US duty

The Association of Enterprises of the Mining and Metallurgical Complex appealed to the President of Ukraine Volodymyr Zelenskiy about the need to resume a dialogue with the US Government to abolish the 25% duty on the import of Ukrainian metal products to the American market.

On October 31, 2021, the United States of America and the European Union announced the settlement of a dispute over an import duty on steel products. Effective January 1, 2022, the US will replace the 25% duty introduced back in March 2018 for national security reasons under Section 232 of the US Trade Expansion Act of 1962 with a tariff quota system for metal imports from the EU.

The annual quota for European metallurgists will amount to 3.3 million tons of steel. If it is exceeded, then additional volumes will be subject to a 25% duty. In parallel, the United States is holding similar consultations with Japan and the United Kingdom on changing the conditions for importing steel products.

We will remind that earlier several states, in particular Australia, Argentina, Brazil, South Korea, Canada and Mexico, have already achieved their exclusion from this protectionist measure and the replacement of tariffs with tariff quotas. At the end of 2020, almost 58% of all US steel imports were shipped without applying a 25% duty.

Washington's agreements with Brussels will have a very negative effect on the Ukrainian mining and metallurgical complex, since domestic metal products on the US market will remain subject to a 25% duty, in contrast to the European one.

OP "Ukrmetallurgprom" has repeatedly called on the government of Ukraine to obtain such an exception in the United States. However, unfortunately, due to the somewhat uncoordinated position of various institutions of the American and Ukrainian executive authorities, in the past years it was not possible to properly complete the corresponding negotiations with the US Government. Probably, the restrained position of the United States could be largely due to the difficult negotiations with the EU at the time.

Ukraine is a strategic partner for the United States and the European Union, so it is only natural that Kiev can count on a similar approach from Washington on the issue of steel duties, as in the case of the EU. Moreover, the import of Ukrainian metal products does not hinder or threaten the US national security, since its share in the structure of steel imports in the US is less than 1%.

In addition, given the exceptional circumstances - Russia's aggression, the occupation of Donbass and the annexation of Crimea, as well as in view of the difficult economic situation in Ukraine, it is very important to abolish this 25% duty to provide tens of thousands of jobs for Ukrainian citizens. MMC of Ukraine generates over UAH 35 billion. taxes, and the export of metallurgical products provides more than 26% of foreign exchange earnings in our country.

It is quite obvious that now a window of opportunity is opening for Ukraine, and therefore, according to metallurgists, it would be advisable to return to negotiations on excluding Ukraine from the 25% duty and replacing it with a tariff quota for the supply of Ukrainian rolled metal to the United States.