European Commission Executive Vice-President Valdis Dombrovskis took to Twitter today to announce that the EU will immediately liberalized trade with Ukraine to boost its economy and help counter Russian aggression:
The mutual economic and security benefits of the Europeans’ move are obvious, and the EU deserves credit for recognizing that fact and following through.
Meanwhile, the United States has been imposing “national security” tariffs on Ukrainian steel — one of the nation’s most important industries (accounting for almost 3% of GDP in 2019) — since March 2018. Prior to the tariffs’ implementation, the Ukrainian embassy testified before the Commerce Department on why imposing the tariffs would (among other things) actually undermine the United States’ own security interests, stating in relevant part that “[t]he viability and success of Ukraine’s steel industry is crucial to economic and political stability of Ukraine. It is also vital to the bilateral US-Ukraine security relationship, which bolsters US strategic interests in the region.” That was, of course, years before Russia invaded Ukraine and bombed one of its largest steel mills in Mariupol.
As Inu Manak and I explained in a paper last year, the Trump administration applied these “Section 232” tariffs (which apply broadly — not just to Ukraine) on dubious legal, economic, and national security grounds. Indeed, we noted back then that a core flaw in the underlying statute is that “the government does not assess a proposed remedy’s effects not only on the industry but also on all other affected groups, particularly other domestic manufacturers and U.S. allies.” The tariffs on Ukrainian steel are a clear but unfortunate example of the last part.
That they still apply, almost two months after the Russian invasion began, adds insult to this injury.