Trade restrictions on minerals and metals

Abstract

Import tariffs and export taxes that are imposed on products far upstream in global supply chains increase trade costs strongly since they are applied on products that will most likely be traded many times before they are sold for final consumption. This paper examines the export and import restrictions in place on minerals and metals. This paper provides a backdrop to the recent trade restrictions on minerals and metals. This issue has had much resonance lately since the United States imposed import tariffs of 25% on steel and 10% on aluminium from some major producing countries. The use of export restrictions by producers of minerals and metals is increasing. Moreover, once export restricting measures are in place, they are rarely lifted. Export taxes on minerals and metals can be high, and some are prohibitively high. High export taxes negatively affect exports by countries that impose them. Import policies are very different to those that apply to exports: in major markets for minerals and metals, import tariffs have been substantially lower on average compared with the export taxes imputed by producing countries. Eight successive rounds of multi-lateral trade negotiations have taken place since 1947, resulting in fairly low import tariffs with many countries having bound their tariffs, i.e. pledged not to raise them above an agreed maximum, at successively lower levels. Export taxes are not subjected to multi-lateral oversight. Trade restrictions are used particularly frequently on metallic waste and scrap, which is generated either as a by-product of the mining and refining process or from recycled goods. Since recovered materials can re-enter the production cycle as inputs, trade restrictions pose a particular challenge to the aim of decoupling industrial production from resource use, which is deemed necessary to achieve compliance with the 2030 Agenda and Sustainable Development Goals (SDGs).