Trade Cases

Biden again extends Ukrainian steel tariff suspension

Written by Laura Miller

President Joe Biden announced that the US will extend the suspension of Section 232 tariffs on steel products imported from Ukraine for another year.

The Biden administration first lifted the 25% Section 232 tariffs on steel imports from Ukraine after the breakout of war with Russia in 2022. The initial waiver was good for one year and was then extended last year. Thus, this marks the administration’s second extension.

“Ukraine’s steel industry continues to be significantly disrupted by the Russian Federation’s unjustified, unprovoked, unyielding, and unconscionable war against Ukraine,” Biden stated in a presidential proclamation.

He said the current disruption of Ukrainian steel production has been a part of broader security discussions between the US and Ukraine. Ongoing talks will likely include “alternative measures to prevent imports of steel from Ukraine from threatening the national security of the United States as Ukraine’s steel production recovers from the significant disruption caused by the war,” he noted.

This year’s announcement notes that the 232-tariff suspension also applies to steel articles imported from the European Union that are manufactured from steel melted and poured in Ukraine. Additionally, these steel articles will not count against the EU’s tariff-rate quotas, the proclamation said.

Steel articles from Ukraine that are eligible for the duty suspension must show a certificate of origin.

Will it help?

Although suspending the 232 tariffs is a nice gesture, it may do little to help Ukraine’s iron and steel industry.

As Stanislav Zinchenko, CEO of the Kyiv-based GMK Center, pointed out to SMU, almost all steel products that can be exported from Ukraine face antidumping duties (AD) when sent to the US.

The following Ukrainian steel products are currently subject to US AD duties: hot-rolled sheet, OCTG, rebar, wire rod, wire strand, and seamless pipe. There is also a suspension agreement in place on cut-to-length plate.

“So, we can not expect significant implications from extending the temporary suspension of tariffs,” he told SMU in an email.

Russia’s war against Ukraine is ongoing. Zinchenko said a “temporary export corridor” has softened logistical constraints for moving products out of the country. However, at present, the country’s “future potential for increasing [iron and steel] production is limited due to power outages and staff shortage connected to mobilization.”

According to US government data, US steel imports from Ukraine in the first four months of this year, at 46,550 short tons, were down 4% year over year. While pipe and tube shipments were down 65% y/y to 16,800 st, long product imports (mostly wire rod) spiked from less than 90 st to 28,500 st in the same time frame.

Laura Miller

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