On The Hill

Steel & Aluminum

Steel Overcapacity

On Wednesday (Oct. 21), a coalition of international steel industry associations, organized by the American Iron and Steel Institute and its European Counterpart Eurofer, issued a joint statement that called for action by governments of steel-producing economies to escalate efforts to stem steel overcapacity through the Global Forum on Steel Excess Capacity (GFSEC).

Next week, the GFSEC will hold a ministerial-level meeting.

Specifically, the coalition of steel industry associations called on participating governments of the forum to:

• Develop stronger disciplines on industrial subsidies and other support measures that contribute to excess capacity and distort markets;
• Uphold effective trade remedies to ensure a level playing field driven by market forces and fair trade;
• Deepen the analysis of the drivers of steel capacity expansions to expose subsidised or non-market driven investments;
• Make a reliable forecast for steel demand in the markets where investments are to be made;
• Add value to the transparency work by developing open communication and information to the public; and
• Communicate to G20 Leaders on the need for expanded efforts to address the growing steel excess capacity crisis.

Notably, China dropped out of the forum last year, citing its previous efforts to cut excess capacity. The country claimed it has done “more than its fair share” on the issue. The associations called on non-participating governments to resume participation in the GFSEC.

To view the joint statement, click here.

Aluminum

This week, U.S. aluminum makers said subsidized Chinese aluminum is still impacting world markets, and claimed this had led other nations to dump the metal into the U.S.

Tom Dobbin, President and CEO of the Aluminum Association, praised the tariffs on China, as well as new duties imposed on 18 other nations who have recently increased their exports to the U.S. These countries include Bahrain, Brazil, Croatia, Egypt, Germany, Greece, India, Indonesia, Italy, Oman, Romania, Serbia, Slovenia, South Africa, South Korea, Spain, Taiwan, and Turkey.

However, the association leaders also said tariffs will not address the core issue of China subsidizing large amounts of aluminum production. Dobbins said this is why a “multilateral approach” is needed to address the issue.

“As unfairly traded products from China have withdrawn from the US market, much of the dumping from China has shifted to other regions,” Dobbins said. “This in turn has driven some of these countries to export their displaced production into the U.S. This is just one more consequence of the China overcapacity challenge,” he added.

 

2020 Presidential Debate

The final U.S. 2020 presidential debate was held on Thursday (Oct. 22) in Nashville, TN. President Donald Trump and former Vice-President Joe Biden offered different visions for the next four years and had opposing views on almost every issue.

The debate had a fairly heavy focus on foreign relations and national security. Biden accused the president of being “friendly” with adversarial nations, and Trump responded that no one has been “tougher” on Russia, citing his sanctions and work with NATO.

Trump also highlighted his work holding the international community accountable to ensure the U.S. gets a better deal and that within alliances, countries pay their fair share. Biden said the current administration has damaged the U.S.’ international standing, reputation, and relationships with key allies.

The candidates disagreed on how they would handle trade issues, mainly related to China. Biden emphasized his record on China as Vice-President, and said the U.S. needs to work with allies to hold China accountable economically. He also highlighted that they did this under the Obama administration through, “upholding steel tariffs and a range of other things.”

Regarding steel tariffs, Trump said: “I charged them 25 percent on dumped steel, because they were killing our steel industry. We were not going to have a steel (industry), and now we have the steel industry.”

Additionally, Trump referenced his deals with China on agriculture, and said they were paying billions of dollars to U.S. farmers. Biden responded that the subsidies were paid for by U.S. taxpayers. Biden also claimed the trade deficit with China has gone up, and that he would ensure China does not force U.S. companies to give up intellectual property or control of their joint ventures.

To view a transcript of the debate, click here.

 

US-Brazil Mini Trade Deal

The U.S. and Brazil reached an agreement this week on a “mini” trade deal that covers regulatory practices, trade facilitation, and anti-corruption measures.

“This triple package will be able to slash red tape and bring about even more growth to our bilateral trade with beneficial effects to the flow of investments as well,” Brazilian President Jair Bolsonaro said.

The announcement came after a team of U.S. officials, led by National Security Adviser Robert O’Brien, were in Brazil for meetings with Bolsonaro and other Brazilian officials.

“I think the steps that are being announced today are going (to) be a very positive sign for the future … and ultimately could lead to a free trade agreement between the two countries,” O’Brien told reporters.^[1] 

Bolsonaro laid out his vision for future discussions, and this includes a tax agreement, a larger trade agreement, and a partnership to redesign global production chains.

On Tuesday (Oct. 20), U.S. Trade Representative Robert Lighthizer said that the Democratic Party has killed any chance, in the short term, of negotiating a free trade agreement with Brazil. Additionally, Lighthizer said the “mini” deal was in the best interest of the U.S., and said it would encourage more trade investment with Brazil.

“The reality is there is no support for an FTA in the Democratic Party,” Lighthizer said during a discussion on U.S.-Brazil relations hosted by the U.S. Chamber of Commerce.

However, Lighthizer noted the Trump administration is currently engaged with Brazil in negotiations over ethanol, sugar market access, and other agricultural concerns.

“I think we have to continue to do this incrementally,” Lighthizer added.^[2] 

Bolsonaro also endorsed President Trump for reelection this week.

 

LNG Deal

This week, the French government stepped in to delay a potential $7 billion deal between a domestic company and a U.S. liquified natural gas company (LNG).

France expressed their concern that U.S. shale gas was too “dirty.” The French trading firm, Engie, was poised to sign the 20-year contract to buy LNG to be delivered from a facility in Brownsville, TX.

“It could still be signed in the coming weeks,” Lorette Philippot, head of private finance campaigns for French environmental group Les Amis de le Terre, said. “But what is sure is the political, reputational risk around the validation of the contracts is one of the elements there. The climate impacts played a role,” he added.^[3] 

The State Department plans to intervene to put pressure on the French government over the deal.

 

Brexit Negotiations

On Wednesday (Oct. 21), U.K. and European Union (EU) chief negotiators announced they will resume negotiations later this week. The two sides said they will begin “intensive” negotiations on a draft legal text for the bill. The talks stalled last week.^[4] 

 

References

^[1] Palmer, Doug & Seligman, Lara. “U.S. Brazil look forward to bigger pact after striking mini trade deal.” Politico Pro, 19 Oct. 2020. https://link.edgepilot.com/s/accac599/Cj_nYnMPD0yS5Q4yR6v1VA?u=https://subscriber.politicopro.com/article/2020/10/bolsonaro-confirms-mini-trade-deal-with-us-2010664

^[2] Palmer, Doug. “Lighthizer: FTA with Brazil ‘not in the cards’ right now.” Politico Pro, 20 Oct. 2020. https://link.edgepilot.com/s/94e3c149/_NVb4w9pVE_vSltgJKZw2A?u=https://subscriber.politicopro.com/article/2020/10/lighthizer-fta-with-brazil-not-in-the-cards-right-now-3984724  

^[3] Lefebvre, Ben. “State Department to push France on delayed U.S. LNG deal.” Politico Pro, 22 Oct. 2020. https://link.edgepilot.com/s/2ffed18a/gP0TuvFpJEapZVilKmD6fA?u=https://subscriber.politicopro.com/article/2020/10/state-department-to-push-france-on-delayed-us-lng-deal-2012485

^[4] Casalicchio, Emilio. “Brexit talks resume after deadlock breaks.” 21 Oct. 2020. https://link.edgepilot.com/s/7b233f1e/YtIOWJZtiUado3B4eQfdGQ?u=https://subscriber.politicopro.com/article/2020/10/brexit-talks-resume-after-deadlock-breaks-3984757