27 June 2023 – While India is still celebrating a supposed victory in the negotiations with the US government on the Section 232 tariffs, there could soon be a sense of gloom on the Indian side. After all, India got nothing in the end. Now official: The EU Safeguard measure will remain in place until at least 2024. The EU and the US are not making any progress in the trade dispute. And the base metals are showing themselves friendly today.
EU Safeguard measure remains in place until at least 2024
The European Commission today officially announced, as already reported to the World Trade Organisation (WTO) in early June, that the EU Safeguard measure on certain steel products will remain in place until at least 30 June 2024.
The EC’s main argument for maintaining the Safeguard measure is the continued existence of US Section 232 tariffs on steel and aluminium imports.
United States and European Union still without a solution in the trade dispute
The European Union has still not reached an agreement with the United States on the settlement of their trade dispute. According to recent reports, progress is either non-existent or extremely slow.
Yet the self-imposed deadline of October 2023 is not too far away. Especially when it comes to steel, both sides seem highly sensitive. The EU does not seem to want to talk about a plan B if the negotiations fail.
India has to withdraw WTO complaints, among others against US Section 232
Indian media and the government have recently reported that a grandiose deal has been reached between India and the United States with regard to the Section 232 tariffs. A tremendous success is postulated here. Is this really so or rather a case of rejoicing too soon with a lot of propaganda?
Section 232 remains in place for India
If one takes a look at the details of the deal, however, it becomes clear that the United States has not exempted India from the Section 232 tariffs, but that they will remain unchanged and both countries will occasionally look at the figures to see whether something might not be feasible at some point. There is still no sign of a tariff rate quota, as the European Union, Japan or the United Kingdom have been able to achieve.
USA 1 : India 0
For this Indian phyrric victory, six ongoing disputes at the WTO will be terminated and India will have to lift the punitive tariffs on certain US products (8 HS codes) that were imposed as a countermeasure to the Section 232 tariffs.
The “win-win” situation is now turning into more of a USA 1 : India 0.
Base metals on the road to recovery?
After a short setback in base metals on the LME yesterday, they are already showing a much friendlier trend again today. Aluminium and zinc are currently up by more than 1%. Nickel is even currently up by about 2.3%.
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