The U.S. announced Oct. 31 that it will lift its Section 232 tariffs on a set volume of steel and aluminum products imported from the European Union. The EU, in turn will move to suspend its related retaliatory tariffs on U.S. goods and will not implement a further tariff increase that had been scheduled to take effect Dec. 1. The two sides will also suspend their related World Trade Organization disputes.
The announcement followed a bilateral agreement under which the U.S. will impose a tariff-rate quota enabling the EU to export steel and aluminum products “at a sustainable historic level” (i.e., the volume of exports prior to the 2018 imposition of the tariffs) to the U.S. without the application of the Section 232 tariffs.
The U.S. and the EU also said they intend to negotiate a global arrangement 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. They said this arrangement “will be open to any interested country that shares our commitment to achieving the goals of restoring market orientation and reducing trade in carbon-intensive steel and aluminum products.”
As a first step, the two sides will create a technical working group charged with sharing relevant data and developing a common methodology for assessing the embedded emissions of traded steel and aluminum. The European Commission said discussions will begin “as soon as possible” and conclude within two years.
President Biden said the arrangement will “restrict access to our markets for dirty steel from countries like China, and counter countries that dump steel in our markets, hammering our workers and harming them badly along with the industry and our environment.” A senior administration official added that “we hope to work with the EU to ensure that Chinese steel doesn’t get transshipped or doesn’t get utilized in European steel products that come into the United States … thereby allowing Chinese steel into the U.S. through the back door.”
The U.S. added that it is continuing to hold consultations with the United Kingdom and Japan, which are also currently subject to the Section 232 tariffs and have imposed their own retaliatory measures against U.S. exports.
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