Trump’s steel wild card hangs over G20 summit
At Donald Trump’s last HAMBURG global summit, climate policy was his wild card — he threatened to quit the Paris Agreement while other leaders sought a united front on the environment.
This time around, leaders signalled that steel is a sticking point.
Trump’s looming decision on punitive steel tariffs hangs in the air as Group of 20 leaders meet in Hamburg with trade among the most divisive issues. Attendees include the U.S. president and China’s Xi Jinping, whose country has long been the target of steel dumping complaints. As the meeting’s first day wrapped up, leaders indicated that steel remains one of the hottest subjects of debate.
“There is a chance to solve the topic of steel overproduction multilaterally, that is within the G20 group,” German Chancellor Angela Merkel said on Friday at the summit, urging fellow leaders to find a common solution to steel overproduction. Otherwise, the risk of “bilateral actions” increases, Merkel said. Italian Prime Minister Paolo Gentiloni said steel “is a key question and an open one.”
Trump’s administration is weighing whether to impose tariffs, quotas or a combination of both on steel imports under national security grounds, even though only a small fraction of U.S. steel is used for defence. Trump’s Commerce Department missed a self-imposed deadline for a decision last month and is expected to announce a verdict soon.
The investigation is peculiar in that the top providers of steel to the U.S. are allies, led by Canada, both the U.S.’s top importer and exporter of steel. Any penalties could have a ripple effect on other trading partners and allies such as Germany, Japan, Russia, South Korea and Mexico, all major steel exporters to the U.S.
Prime Minister Justin Trudeau’s government has been privately assured by the U.S. that Canada won’t be affected by any steel measures, according to a federal official who spoke on condition of anonymity. Trudeau has said it’s unlikely Canada will be affected.
The tension over steel evokes the confrontations at the Group of Seven summit in May, where leaders haggled over climate policy before eventually settling on a sixagainst-one stance with Trump as the outlier. Days afterward, Trump announced he’d yank the U.S. out of the Paris climate accord.
“It’s a hard issue and it can be a very provocative issue,” said Thomas Bernes, a former International Monetary Fund and World Bank official.
European countries would prefer a multilateral solution on steel, he said. “Everyone is terrified” that any U.S. measures on steel “would be a unilateral action and would open up the floodgates for other countries to do the same,” he said.