The United States is temporarily suspending tariffs on Ukrainian steel, the Commerce Department announced Monday, citing the damage Russian President Vladimir Putin’s war in Ukraine has done to the industry.
The Commerce Department said Monday that it would withdraw the tariffs for a year. Some of Ukraine’s largest steel communities have been among those hardest hits during the war, including the Mariupol mill that’s the only part of the strategically important port city not under Russian control.
“We can’t just admire the fortitude and spirit of the Ukrainian people — we need to have their backs and support one of the most important industries to Ukraine’s economic well-being,” Commerce Secretary Gina M. Raimondo said. “For steel mills to continue as an economic lifeline for the people of Ukraine, they must be able to export their steel.”
Then-President Donald Trump in 2018 imposed a tariff of 25% on steel imports from countries, including Ukraine. Lawmakers from both parties in April had urged President Joe Biden to lift the tariffs.
The Trump administration office a little-used provision in US trade law to call foreign steel a threat to American national security. The move outraged US allies, and critics said they did little to address the real cause of stress for US steel producers: massive overproduction by the Chinese, whose steel shipments to the US are already limited by other trade barriers.
The Biden administration has removed most of the tariffs on steel from the European Union, the United Kingdom and Japan, allowing their metals to come in duty-free up to a quota. No such quota applies to the Ukrainian imports in the move announced Monday.
Ukraine is the 13th largest steel producer and typically exports about 80% of its production. Last month, the European Commission proposed a one-year suspension of import duties on all Ukrainian goods not covered by an existing free trade deal.
The European Union also proposed exempting Ukraine from measures that limit steel imports, and lifting anti-dumping tariffs the EU currently imposes on Ukrainian steel tubes, hot-rolled flat steel products and ironing boards.
Senate Finance Committee chair Ron Wyden praised the move saying, “it is important that the United States do everything it can to support the Ukrainian economy.”
The US Chamber of Commerce noted Ukraine exported a total of $1.9 billion in goods to the United States in 2021 – less than 0.1% of all US imports but approximately 2.8% of Ukraine’s total exports.
Prior to Russia’s invasion, nearly half of US imports from Ukraine were metals such as iron, pig iron, and steel, but they represented a tiny fraction of total US imports of metals.
The Commerce Department says Ukraine’s steel industry accounts for one in 13 Ukrainians jobs. Steel and related sectors comprise nearly 12% of Ukraine’s gross domestic product (GDP).