The European Union and the U.S. have reached an agreement that will see the continued suspension of extra tariffs on two-way trade.
In October 2021 the U.S. lifted its Section 232 tariffs on steel and aluminum products imported from the EU after establishing a tariff-rate quota designed to limit such imports to “a sustainable historic level” (i.e., the volume shipped prior to the 2018 imposition of the tariffs). The EU, in turn, suspended its related retaliatory tariffs on U.S. goods and determined not to implement a further tariff increase that had been scheduled to take effect later that year. Related World Trade Organization disputes were also suspended.
These actions were designed to give the two sides time to negotiate a global arrangement designed to (1) discourage trade in high-carbon steel and aluminum that contributes to global excess capacity from other countries and (2) ensure that domestic policies support lowering the carbon intensity of these industries. Because those negotiations have not yet been concluded there had been concern that the U.S. and EU tariffs would be reimposed beginning Jan. 1, 2024.
The EU announced Dec. 19 its decision to continue to suspend its retaliatory tariffs until March 31, 2025, in return for the U.S. extending its TRQ on EU steel and agreeing to provide for further exclusions from the Section 232 tariffs for EU exporters.
However, a related note from the Office of the U.S. Trade Representative made no mention of this agreement, saying only that the EU “is taking steps to join us in extending the time for these negotiations.” The EU did point out that the U.S. must still complete its own procedures to put the agreement into effect, but USTR said nothing about what those procedures are or when they might be completed.
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