AGC of America meets with the White House’s Office of the United States Trade Representative Ambassador Katherine Tai to discuss ongoing concerns relating to import tariffs and their effects on prices for construction materials and equipment.
On November 28, AGC of America met with the White House’s Office of the United States Trade Representative (USTR) Ambassador Katherine Tai to discuss ongoing concerns relating to import tariffs and their effects on the prices for construction materials and equipment. As has been noted in the US International Trade Commission’s (ITC) recent report, the Section 232 and 301 tariffs, in effect since 2018, have directly contributed to increasing domestic prices for construction materials such as steel and aluminum.
The meeting took place at a time when the USTR is in the midst of negotiations to extend or alter the two-year limit for an agreement between the U.S. and European Union to address tariffs for steel and aluminum imported from the EU that is set to expire on January 1, 2024. This agreement temporarily replaced the steel and aluminum tariffs, which had been in effect since 2018, with a quota system. The agreement lifted a 25% import tax on 3.3 million tons of steel and 10% import tax on 384 thousand metric tons of aluminum, after which the original tariffs would take effect. However, the agreement is set to expire soon, threatening to once again impose the same tariff rates without quotas and increase the price of construction materials. AGC urged the White House to continue to extend the trade deal with the EU while forgoing such short-term limits to reduce material price uncertainty and volatility.
While the U.S. and EU continue to hold talks to extend this deal, several disagreements during recent meetings have highlighted the likely possibility of the tariffs resuming at the beginning of 2024. For context, the EU supplies nearly 15% of the total steel imported into the United States and a 25% tariff would significantly increase the price of steel coming from the EU. As has been reported by the ITC, the steel and aluminum tariffs are completely passed on to consumers and have been directly linked to price increases for all steel and aluminum products in the U.S., regardless of their origin.
The U.S. has, since 2020, agreed to various tariff quota arrangements with individual nations that vary in the number of quotas and terms. While the agreements reduce the tariffs passed on to U.S. businesses, a tariff quota system has been found to still lead to higher prices as they are usually set to import values from 2018 and limit the amount of competition between steel and aluminum producers.
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