G20 adopts Milwaukee Framework to curb global steel excess capacity

G20 trade officials in Milwaukee announced a new agreement known as the Milwaukee Framework, which calls on member nations to curb market-distorting subsidies and strengthen monitoring of steel imports and trade circumvention. The accord endorses evidence-based actions against excess capacity, a measure that may include tariffs.

This development follows a broader consensus reached at the G20 finance ministers meeting in Asheville, North Carolina, in September. During that session, the United States and nearly every other G20 economy agreed that large, persistent trade imbalances can harm other countries. The group signed a statement urging nations with significant surpluses to address policies that leave them overly reliant on exports for growth. China was the only G20 member present to object to that statement.

U.S. Trade Representative Jamieson Greer told reporters on the sidelines of the conference that most countries agree with the diagnosis of these global issues but have historically been reluctant to act. He stated that the Milwaukee agreement could not have happened in 2015 and noted that other countries are adjusting because they want to maintain access to the U.S. market. Greer said these nations are coming on board as the U.S. presents creative ideas and new structures.

EU trade chief Maros Sefcovic welcomed the administration's focus on excess capacity during a roundtable held at Rockwell Automation's Milwaukee headquarters. European industries are facing pressure from cheap imports driven by global overcapacity, much of which originates from China. In response, Europe is considering more trade barriers, potentially including harsher tariffs. Greer observed that European officials are taking steps similar to those the U.S. began a decade ago, adding that he believes Europe also contributes to global excess capacity.

The cooperative stance exists alongside ongoing disputes between the U.S. and its trading partners. Most Canadian steel exports to the U.S. currently face a 50% tariff, and an import ban on certain Canadian products took effect as Canadian officials arrived in Milwaukee. Separately, Greer is examining production levels in 16 economies; these probes could lead to new tariffs. He acknowledged this tension at the roundtable, noting that while the U.S. and its partners may have disputes, they share concerns about excess production in other regions.

Foreign trade ministers toured Rockwell Automation's factory floor on a field trip intended to showcase advanced domestic manufacturing. The company, which makes automation technology for factory floors, is investing $2 billion in U.S. plants, talent, and technology. However, tariffs are raising costs for the manufacturer. Rockwell told investors over the summer that some customers are delaying projects due to the volatile environment regarding tariffs and inflation.

CEO Blake Moret said on the company's earnings call that customers want to ensure the cost side of their business case is solid in such conditions.