The U.S. and the United Kingdom have announced an agreement under which they will each drop tariffs imposed on each other’s goods several years ago.

Beginning June 1, the U.S. will replace its Section 232 tariffs on steel and aluminum from the UK with tariff-rate quotas allowing up to 500,000 tons of UK steel and 12.3 thousand tons of UK aluminum to enter the U.S. duty-free each year, though those amounts may be adjusted annually. Imports in excess of these amounts will be subject to the existing tariffs, which are 25 percent and 10 percent, respectively.

Steel products must be melted and poured in the UK to enter under the TRQ, although a small amount may be further processed in the EU. Semi-finished (wrought) aluminum products may not contain primary aluminum from China, Russia, or Belarus to qualify for the TRQ.

The UK, in turn, will suspend its retaliatory tariffs on more than $500 million worth of goods imported from the U.S., including whiskey, blue jeans, motorcycles, and other products.

The agreement requires any U.K. steel company owned by a Chinese entity to undertake an audit of its financial records to assess influence from the Chinese government and share the results of that audit with the U.S. The U.S. will be able to prohibit imports of steel from such companies under the TRQ if certain conditions are not met.

In addition, the U.S. and the UK committed to share publicly available information on (1) customs matters, including how to approach detection of fraud, evasion, and circumvention of duties, (2) trade remedies, including possible self-initiation of trade enforcement actions, and (3) non-market excess capacity and its effects on their respective steel and aluminum industries. The two sides also may share publicly available import data with respect to steel, including from third-country markets, and will consult each other regarding import surges.

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