LONDON — Britain is pushing to form a Western alliance with the European Union to curb China’s dominance in the global steel market, multiple figures familiar with the talks told POLITICO.
The hope in London is that a coordinated approach could help the U.K. dodge the new tariffs Brussels plans to impose — a 50 percent duty aimed at shielding EU producers from China’s industrial overproduction.
Britain, which finds itself at the mercy of EU trade action post-Brexit, is currently seeking carve-outs from those measures.
The idea under consideration is for the U.K. and EU to form a Western steel alliance — potentially including Washington — that would align tariff policies and grant members preferential tariffs on steel trade.
A senior EU official said earlier this month that the bloc had “no other choice” but to defend its industry, warning Europe was “in deep trouble because of this problem of overcapacities.” Still, the official left the door open to talks with London, urging both sides to sit down to negotiate.
One other EU official, granted anonymity to speak freely about ongoing talks, said the concept of a steel “club” has been circulating for “quite some time” but is now looking “more appealing.” They added that the EU and U.K. already cooperate in multilateral forums such as the Global Forum on Steel Excess Capacity.
The two sides have already agreed to align their upcoming carbon taxes on imports of steel and other products produced through highly polluting manufacturing processes.
U.S. Trade Representative Jamieson Greer called for stronger coordination against Chinese steel earlier this month, warning that the “current international trade rules are inadequate” and questioning “the political will of foreign members to take action.”
Britain currently sends half of its steel exports to the EU, making the bloc’s upcoming tariffs a serious threat to U.K. producers.
UK Steel Director Gareth Stace said the government’s “focus must be on securing essential U.K. carve outs in the EU’s quotas, and tightening its own trade defenses.” But the lobby group boss added that a broader alliance could help to resolve global overcapacity issues and keep heavily subsidized imports out of Britain.
A U.K. government spokesperson said: “We are continuing our engagement with the EU following their recent announcement. We are also working with international partners on solutions which can address wider overcapacity.”
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