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Liam Fox is failing to protect British interests against Trump’s steel tariffs – this doesn’t bode well for a post-Brexit deal with the US

The Secretary of State is not the shy reticent type, so could his silence on these matters imply that a trade deal with the US will be more difficult than the Government has led us to believe?

Barry Gardiner
Friday 09 March 2018 10:52 GMT
President Trump announced that he would be imposing tariffs of 25 per cent on steel imports and 10 per cent on aluminium
President Trump announced that he would be imposing tariffs of 25 per cent on steel imports and 10 per cent on aluminium (Getty)

The world steel industry is on the verge of a crisis. We are facing an existential threat to our domestic producers and to jobs in this country. The underlying cause being overcapacity in the global market and a long-standing failure by governments around the world – including our own – to tackle dumping and unfair practices.

While this situation has not been created by President Trump alone, the manner in which he has gone about trying to resolve the impact global oversupply is having on US producer, is fundamentally damaging, and threatens to tip a very bad situation into a full-scale global trade crisis.

World leaders need to work together through the rules-based system of the WTO to tackle unfair practices, including the widespread dumping of steel on world markets at less than market price.

The universal application of 25 per cent tariffs on steel imports into the US would be unjust and unjustifiable. The suggestion that such tariffs are necessary under Section 232 to mitigate a threat to American national security is patently false.

The US defence secretary himself has publicly stated that US military requirements represent no more than 3 per cent of US steel production, and that the Department of Defence is able to acquire the steel and aluminium it needs for US requirements.

To apply tariffs to all countries would undermine the rules-based system and threaten the viability of producers who have respected those rules, treating them no differently to their competitors who have not.

Donald Trump unveils new tariffs on steel and aluminium imports to US

UK steel exports to the US represent 15 per cent of our total steel exports, and 32,000 skilled men and women are employed in the steel sector in the United Kingdom. Today they are worried about their future.

The threat is not just from US tariffs on UK steel. As the US market closes, countries that would otherwise export into the US will seek to divert their production to the UK. This will undercut domestic producers here.

Furthermore, our industry is particularly vulnerable because we have a Government that prides itself on taking the weakest possible approach to remedying unfair practices, by the imposition of the Lesser Duty Rule.

In recent years, our Government actively sought to block efforts at the European Union to improve and modernise trade remedies. Both the Trade Bill and the Taxation (Cross-Border Trade) Bill, currently going through Parliament, were opposed by the Labour Party precisely because they proposed to create one of the weakest trade remedy regimes in the world – not my words, but the words of the Manufacturing Trade Remedies Alliance.

It has been a week since President Trump announced that he would be imposing tariffs of 25 per cent on steel imports and 10 per cent on aluminium, and it is expected that this will be signed into force today.

Almost immediately, a number of world leaders have publicly condemned the decision, including the Canadian Prime Minister and foreign minister, and the European Commission President and Trade Commissioner.

The governments of Brazil, China, Japan and Mexico have all indicated that they are looking at what options might be taken in response. The Australian foreign minister is currently in the US seeking urgent meetings with Secretary Tillerson to discuss the matter.

President Trump initiated the Section 232 investigation into steel imports on 20 April 2017. Since then, Liam Fox has made two trips to the US, met his counterparts at three WTO conferences, one OECD conference and paid two visits to China – the world’s largest steel producer. His US-UK Trade and Investment Working Group has twice met and he has recently appointed a new trade commissioner to North America.

Yet the Secretary of State has failed to come to the House of Commons to tell Parliament what representations he has made to the US to protect UK steel producers?

It appears that President Trump wishes to disrupt the global multilateral trading system as much as possible. He has said that he would welcome a trade war, and thinks America could win it.

The Secretary of State must tell us whether he considers it prudent, therefore, for the EU to effectively give the President what he wants by suggesting illegal retaliatory measures against American products like Harley Davidson, cranberries, and Bourbon whiskey.

Why has the Secretary of State failed to set out the representations he has made to the European Commission in this respect? Liam Fox is not the shy reticent type, so could his silence on these matters signal a reluctance to say anything that might suggest a post-Brexit trade deal with the USA will be more difficult than the Government has consistently led us to believe?

We need a Government that will make clear representations at the WTO and the OECD calling for a multilateral solution to tackle the issue of overcapacity, and to determine appropriate responses to the imposition of these tariffs. One that will stand up for British industry; tackle unfair practices that distort the market, and stop British producers having to compete on an unlevel playing field.

Now is not the time for silence. Nor is it the time for foolish knee-jerk reactions that would make the situation worse. It is time to prove that the WTO and the multilateral rules-based system can swiftly and fairly deal with those countries who seek to undermine the rules – however large they may be – and restore a fair and open global trading system.

Barry Gardiner is MP for Brent North and the Shadow International Trade Secretary.

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