In a joint statement issued by the governments of the United States as well as the United Kingdom, the nations announced they have worked out an arrangement that will ease tariffs on steel, aluminum and a few other products that are traded between the two countries. As of June 1, the United Kingdom will be permitted to import a predetermined amount of steel and aluminum into the United States without having to pay the costs associated with duties, Supply Chain Dive reported. In response to this largesse, the U.K. will rein in what tariffs it charges for U.S.-based products by $500 million.
Similar to gasoline, steel prices have been rising for awhile now and are climbing even more exponentially in recent weeks due to the war in Ukraine, which is a major steel producer.
Angelica Donati, who heads business development for the construction firm Donata SpA, told Bloomberg that certain kinds of steel are virtually impossible to obtain, which has exacerbated issues affecting the global supply chain.
"Corten steel, mostly produced in Ukraine, is completely unavailable at the moment," Donati told the media conglomerate. "This means that any site where corten is used — it is a major component for viaducts in Italy, for example — will inevitably have to stop production." Corten steel is also commonly used in street furniture fabrication and for signage.
Tariff implementation depends on volume
Officials in the U.S. and U.K. are optimistic that this newly struck agreement will help to increase the global supply of steel by stimulating the free market and encouraging trade activity. However, the tariffs aren't being taken off the table entirely. Whether they go into effect are not depends on volume. As referenced by Supply Chain Dive, the U.K. can send as much as 900,000 metric tons of aluminum and 500,000 metric tons of steel into the U.S. in a given year before triggering tariffs. The E.U., meanwhile, can import 18,366 metric tons of aluminum and 3.3 million metric tons of steel.
Gina Raimondo, the current secretary for the Department of Commerce, said this deal is a win-win scenario for both countries, but especially the U.S.
"Today's historic deal is a testament to that ambitious goal and will benefit America's steel and aluminum industries and workers by protecting manufacturing, as well as consumers by easing inflationary pressures in the U.S.," she stated. "By allowing for a flow of duty-free steel and aluminum from the U.K., we further ease the gap between supply and demand for these products in the United States."
The United Kingdom is a major trading partner of the United States. Based on the most recent government figures available, the U.K. was the U.S.' fifth largest in terms of exports.
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