American Steel Industry Advocates for Import Levies on High-Carbon Steel

The discourse on the future trajectory of the U.S. steel industry and the transition to green steel is prominently marked by the sector's enduring battle against imports and global oversupply, as highlighted in a report by E&E News.

To address these challenges, steel companies are advocating for the adoption of the Leveling the Playing Field 2.0 Act. This bipartisan legislation empowers the Commerce Department to levy tariffs on governments supporting businesses in foreign countries. Presently, the bill faces a deadlock in both houses of Congress.

According to data from the American Iron and Steel Institute (AISI), in 2023, the U.S. produced 89.7 million tons of steel while importing 28.2 million tons. Foreign sources constitute over a fifth of steel consumption in the U.S., with Mexico identified as a crucial transshipment hub for foreign steel.

In ongoing negotiations between the U.S. and the EU, a green steel club is being considered. Although the parties recently resumed the mutual suspension of tariffs imposed during the Trump administration, skepticism exists regarding the prospects of establishing a global standard for low-emission steel trade due to persistent 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 expanding trade in low-carbon steel.

"While the American and European steel industries are relatively green, there is room for further decarbonization," she remarked.

Presently, U.S. lawmakers are coalescing around the PROVE IT Act, approved by the Senate Committee on Environment and Public Works in January. The legislation mandates the Department of Energy to scrutinize and determine the emissions intensity of various U.S.-made products, including steel, in comparison to products from other countries.

Although some conservative groups criticize it as a potential precursor to a carbon tax, experts assert its primary focus is curbing imports from China and India.

U.S. steel producers endorse this approach, advocating for a premium on countries and companies producing high-emission steel. Philip Bell, president of the American Steel Manufacturers Association (SMA), stated that mechanisms like the PROVE IT Act could set the stage for such surcharges.

While the fate of the PROVE IT Act remains uncertain, supporters anticipate its growing popularity, especially if aligned with a potential return of Donald Trump to the U.S. presidency, given his protectionist stance and firm position on trade issues with China. As reported earlier, groups representing U.S. steelmakers are pushing for legislative support in 2024 to bolster domestic demand and restrict imports of carbon-intensive steel from nations like China.