Monitoring Mechanism for Steel, Aluminium Exports to the U.S. in Final Stages 2023

Monitoring Mechanism for Steel, Aluminium Exports to the U.S. in Final Stages 2023

The process of establishing a cooperative monitoring system to track Indian shipments of steel and aluminium to the US is almost complete. A senior official stated on Friday that it is a need before shipments of these metals from India may reach the US market without having to pay additional tariffs.

“A cooperative monitoring mechanism is now being set up. It would support the monitoring of these items’ exports and the resolution of any issues, the official added.

Under a national security statute, the former government of President Donald Trump levied the extra import taxes on these two metals in 2018. The taxes, which did not just apply to India, were 10% for aluminium and 25% for steel. I

ndia has increased import taxes on products including apples, almonds, walnuts, and several types of iron and steel in response.Both parties filed complaints with the World Trade Organisation (WTO) on the tit-for-tat tariffs.

When Prime Minister Narendra Modi visited the US in June of this year, both nations made the decision to put an end to the issues along with four others.

Steel and aluminium shipments from India to the US will be free from extra charges now that the issue is officially resolved. The tariffs won’t apply to about 70% of steel exports and 80% of aluminium exports.

In exchange, India has promised the US that it will lift the retaliatory tariffs it had slapped on 21 additional imports, including diagnostic tools, apples, chickpeas, lentils, walnuts, boric acid, and diagnostic reagents.

India’s steel and aluminium exports to the US totaled $1.21 billion in 2018 as a result of the extra tariffs. The $241 million in export-related duties was imposed. In June 2019, India imposed retaliatory duties that increased the cost of US imports of the 28 commodities on the list by an extra $217 million.

By the end of 2019, the US and Canada and Mexico had resolved a comparable issue. While imports of steel and aluminium from certain nations were spared from the additional duties, known as Section 232 tariffs, the accord also included a system to avoid spikes in imports of steel and aluminium as well as intensive monitoring.

The US may re-impose Section 232 tariffs on particular steel and aluminium goods if imports of those materials spike. The only items on which Canada and Mexico might retaliate would be those made of steel and aluminium.

The diplomat did not say if India will be subject to the same restrictions.

The US has a fairly active system in place to keep track of imports of steel and aluminium in order to foresee price fluctuations, import spikes, and any potential effects on the domestic sector.

A comprehensive monitoring mechanism for steel and aluminium exports to the United States is nearing completion. This landmark development comes as a response to the increasingly stringent trade policies set by the U.S. government concerning the importation of metals.

Designed to ensure both quality and trade fairness, the monitoring system promises to enhance the transparency and accountability of international trade in these sectors.

Over the years, the U.S. has raised concerns over the alleged dumping of steel and aluminium by several countries. These actions have been attributed to the overproduction of these metals in foreign countries, which subsequently flood the U.S. market at below-market prices. To combat these challenges, the U.S. had imposed tariffs and quotas on various countries. The new monitoring mechanism aims to address these issues comprehensively and ensure that trade practices meet the set standards.

One of the key features of the mechanism is real-time tracking of all exports. With the use of blockchain technology, the system will keep a secure, immutable record of each transaction, making it easier to spot any anomalies or suspicious activities.

Before exporting, steel and aluminium products will be subjected to rigorous quality checks to ensure they meet the American standards. These checks will be automated using artificial intelligence, which can identify even minor inconsistencies that may not be visible to the human eye.

A sophisticated pricing algorithm will keep track of the global prices of steel and aluminium, to ensure that the export prices are aligned with the current market rates. This will prevent dumping and help maintain a level playing field.

Regular compliance audits will be conducted to ensure that all stakeholders adhere to the set guidelines. Non-compliance will result in penalties and could lead to expulsion from the U.S. market.

An open API will allow for the sharing of data between the U.S. and exporting countries. This will foster transparency and enable both parties to take corrective measures swiftly when necessary.

Several stakeholders are actively participating in the development of this monitoring system:

• Government Agencies: Both U.S. Customs and Border Protection and trade ministries from exporting countries are actively involved in creating and implementing the system.
• Manufacturers: Metal producers have an interest in making sure that the system promotes fair trade and not impose unnecessary burdens.
• Trade Associations: Organizations like the American Iron and Steel Institute (AISI) and the Aluminum Association have been consulted during the developmental phases.
• Tech Companies: Firms specializing in blockchain, AI, and data analytics have been contracted to build the technical backbone of the monitoring mechanism.

Since the system involves real-time tracking and data sharing, ensuring robust security measures is crucial.The high cost of setting up and maintaining the system could be a burden on smaller exporters.Aligning the system with existing laws and trade agreements is a complex task that requires thorough scrutiny.

As the monitoring mechanism for steel and aluminium exports to the U.S. enters its final stages, the stakes are high for both exporters and the U.S. government. By prioritizing transparency, quality, and fair pricing, the system aims to elevate international trade practices to new heights. However, its success will ultimately depend on effective implementation and the collaborative efforts of all stakeholders involved.