SEATTLE (Scrap Monster): The United States and the European Union are weighing new tariffs on Chinese steel and aluminium as part of a bid to fight carbon emissions, Bloomberg News reported on Monday, citing people familiar with the matter.
China, which produces more than half of the world's steel, is accused by the EU and United States of creating over-capacity that is threatening the survival of their own steel industries.
The idea floated within President Joe Biden's administration is still in an initial phase and hasn't been formally proposed, the report said, adding that an agreement with the EU isn't likely until late next year at the earliest.
The office of the United States Trade Representative and a spokesperson for the European Council for trade and development did not immediately respond to Reuters requests for comment.
China's Ministry of Commerce, the China Iron and Steel Association and China Nonferrous Metals Industry Association could not be reached for comment.
The new framework, which is somewhat similar to an agreement reached between the EU and United States last year, is mainly aimed at China, along with other large polluting nations, the Bloomberg report said.
U.S. Trade Representative Katherine Tai and her team had presented the framework to European Commissioner Valdis Dombrovskis and others in Prague in late October, the report said.
However, EU officials had then raised the issue of legality and compatibility with World Trade Organization rules, as well as with the bloc's internal carbon pricing mechanism, the report said.
China currently exports little steel and aluminium to the United States, with most products excluded from the market by anti-dumping duties as well as trade tariffs.
Last year, steel exports to the U.S. accounted for 2.1% of total overseas shipments, according to Chinese customs data, and aluminium exports typically account for around 5%.
The European Union also already levies tariffs on some Chinese aluminium and steel products.
Global iron and steel production emit a combined 3.4 billion tonnes of carbon annually, or 7% of global emissions, according to consultancy Wood Mackenzie.
China produces more than 60% of the world's steel and 57% of aluminium.