USTR and Commerce Annouce Deal With The European Union On 232 Steel And Aluminum Tariffs

This weekend, USTR and Commerce announced a deal with the European Union regarding the 232 steel and aluminum tariffs. A joint U.S.-EU statement can be viewed here, the announcement of actions on EU imports can be viewed here, and a Fact Sheet on the deal can be viewed here.

According to the announcement, the following general principles will guide future U.S.-EU cooperation:

• Replacement of Section 232 tariffs with tariff-rate quota (TRQ).
• Agreement to cooperate in trade remedies and customs matters and development of additional actions.
• Negotiation of global steel and aluminum arrangements that restore market-oriented conditions and address carbon intensity.
• Lifting of the EU’s retaliatory tariffs and suspension of disputes before panels of the World Trade Organization.
• Other measures to ensure market-oriented conditions in the EU market.

The full announcement is as follows:

United States Trade Representative Katherine C. Tai and United States Secretary of Commerce Gina M. Raimondo released the following statements today upon agreement with the European Union to modify 232 steel and aluminum measures to allow the resumption of duty-free imports of European steel and aluminum into the United States in line with historical trade flows.

Statement from Ambassador Katherine Tai:
“The agreements announced today delivers on President Biden’s vision to repair relationships with our European partners while also helping to ensure the long-term viability of our steel and aluminum industries, the communities they support, and most importantly, the workers in these industries on both sides of the Atlantic. In addition to the EU eliminating the retaliatory tariffs against the United States, we have agreed to suspend the WTO disputes against each other related to the 232 disputes.

“With this dispute behind us, we are in a stronger position to address global overcapacity from China with an enhanced enforcement mechanism to prevent leakage of Chinese steel and aluminum into the U.S. market. And the deal is a significant win on one of President Biden’s top priorities – fighting climate change.

“The first ever carbon-based arrangement on steel and aluminum trade contemplated by the agreements would create greater incentives for reducing carbon intensity across modes of production of steel and aluminum made by American and European companies. We know our allies and trading partners agree, so we will encourage like-minded economies that share our collective commitment to market-based principles and addressing the carbon intensity of these industries to join our global arrangement.

“Throughout these negotiations and our successful effort to resolve the Boeing-Airbus dispute earlier this year, European Commission Executive Vice President Valdis Dombrovskis has been a thoughtful, honest partner. This renewed cooperation and shared commitment to creating durable trade policy that puts workers front and center will lead to greater prosperity for our citizens on both sides of the Atlantic and around world.”

Statement from Commerce Secretary Gina M. Raimondo:
“Today’s announcement is great news for America’s steel and aluminum industries and workers, as well as American consumers. Working with our European counterparts, we have secured a deal that will protect American jobs; avoid retaliatory tariffs on iconic American brands like Harley Davidson and the Kentucky bourbon industry; reduce inflationary pressures on products like cars, trucks, appliances and canned goods; and alleviate a major supply chain crunch by supporting increased steel and aluminum capacity in the US.

“In the past year, the cost of steel used by America’s auto and appliance manufacturers has more than tripled, creating increased costs for consumers. Today’s news will provide much-needed relief for those workers and industries, the workers and businesses who were threatened with overwhelming retaliatory tariffs of 50 percent and American consumers, who are worried about increasing prices.

“Finally, and importantly, this deal creates a framework through which the US and EU agree to take carbon intensity into account in future negotiations. The US and the EU both produce steel and aluminum that is “cleaner” than what is produced in much of the world. The lack of environmental standards in places like China is part of what drives down their costs, and it’s a major contributor to climate change. Today’s deal begins to address those challenges.

“None of this would have been possible without President Biden’s vision. I cannot give him enough credit for his leadership in boldly directing us to work with our European partners to find a path forward that benefits America’s families, workers and consumers, while also addressing climate change.

“I’d also like to thank our counterparts at the EU, especially President Ursula von der Leyen and Executive Vice President Valdis Dombrovskis, for their partnership in this effort. This was a successful negotiation because both sides agreed that we faced a shared challenge of global excess capacity, which was not of our own making, that inaction was not acceptable, and that it was in our mutual interest to find a compromise.”

For more information, please contact Samantha Rocci at srocci@rvia.org.