Steel and aluminum are critical components of the American economy. From cars and trucks to our appliances and beer cans, Americans depend on steel and aluminum for everyday items. Many Americans also rely on the steel and aluminum industries for good-paying jobs. The steel industry supports nearly 2 million Americans who, on average, earn 27% more than the median earnings for men and 58% more than the median for women, according to the Economic Policy Institute.
But for too long, China has been flooding global markets with its cheap steel and aluminum, artificially lowering prices, and making it impossible for America’s steel and aluminum industries to compete. The effects of this reality have rippled through the American economy, harming manufacturers, workers and consumers. Between January 2015 and October 2016, America lost 16,000 steel jobs. The American Iron and Steel Institute says that the biggest factor for those losses was unfair trade practices like the ones being carried out by China. An excess of subsidized steel and aluminum from China made it impossible for U.S. industries to compete, and American workers paid the price. And all of us also paid the price because the production of Chinese steel — some of the world’s dirtiest — pumped tons of carbon into the atmosphere.
The previous administration imposed steep tariffs on steel and aluminum not just from China, but from our allies and partners. These tariffs were a huge irritant for our allies and stood in the way of us working together to counter cheap steel being dumped into our markets. The European Commission planned to hike retaliatory tariffs by 50% on iconic American companies like Harley Davidson, Levi’s Jeans and the Kentucky Bourbon industry, set to take effect on Dec. 1, threatening millions of jobs across the country. No business could have survived that.
When President Joe Biden came into office, he was clear that we had to find a solution that would protect the U.S. steel and aluminum industries and the American workers they employ, while also repairing and strengthening our relationship with the European Union — one of our most trusted partners — and supporting the export of American-made products.
Last month, President Biden and European Commission President Ursula Von der Leyen announced a major breakthrough in our approach to steel and aluminum trade that will protect American jobs and American industry, address the existential threat of climate change and lower costs for middle-class families at home. The United States will allow a sustainable amount of steel and aluminum to enter from the EU, ensuring that these products are produced entirely in the EU. This agreement is a huge win for American workers, farmers, businesses, families, and the environment. It will protect good-paying union jobs, lower prices for consumers, maintain our competitiveness, and reduce emissions.
Many Americans are experiencing the pinch of price increases — from the department store to the used car lot — due to COVID-19 related supply-chain disruptions. The steel industry was not immune to these effects either. Over the last 12 months, the cost of steel used by American manufacturers more than tripled. And those price increases were passed down to consumers from washing machines and houses to televisions and beer cans. These quotas will help drive down some of those price increases for American consumers, while protecting America’s industries and workers at the same time.
Going forward, we will continue our whole of government approach to identify and address issues in the global supply chain and use every available tool to reduce inflationary pressures.
And there’s more to it. Not only does this deal remove one of the largest, bilateral irritants in the U.S.- EU relationship, it transforms it into joint, forward progress on two of the largest problems we face: the threat of climate change and the economic threat posed by unfair competition by China.
Through this deal, we will begin negotiations between the U.S. and our partners in the European Union to create the world’s first carbon-based sectoral agreement on steel and aluminum trade. The United States produces some of the cleanest steel in the world, while China produces some of the dirtiest. By updating the rules of trade for the 21st century in a way that rewards the production of cleaner steel and aluminum, we can both promote decarbonization and ensure that our steel industry and workers reap the benefits of their cleaner production, ensuring a competitive American steel and aluminum industry for decades to come.
By agreeing to this framework, we are not only protecting American workers, but we are also showing the entire world that clean manufacturing will benefit our companies and workers, as well as consumers. Because of this deal, we are safer today, our economy will be stronger tomorrow and our planet will be cleaner for years to come. As President Biden laid out since day one, our economic policies — from these steel and aluminum agreements to the Build Back Better agenda — are about strengthening and protecting American industries, American workers and American families. This is just the beginning, and we will continue to make our country more competitive, level the playing field for working families and position the U.S.to win the 21st century.
Katherine Tai is the U.S. Trade Representative and Gina M. Raimondo is the U.S. Commerce Secretary.
