EU Delays Tariff Resumption on US Goods Amid Lingering Steel and Aluminium Trade Dispute

The European Union (EU) has formally declared the extension of the suspension of rebalancing tariffs on US products in the context of the steel and aluminium dispute until March 31, 2025. Originally implemented during the Trump Presidency, these EU rebalancing tariffs on US exports were a response to the US "Section 232” tariffs on steel and aluminium.

This extension is the outcome of an agreement reached with the US. The EU has prolonged the suspension of rebalancing tariffs in exchange for the US extending the suspension of its tariffs based on historical trade volumes reflected in the Tariff-Rate Quota (TRQ) system established in January 2022. Additionally, the US has committed to providing further exclusions from the tariffs for EU exporters. The EU remains committed to engaging constructively with the US to protect its legal rights and eliminate US 232 tariffs on EU exports permanently.

The prolongation, as documented in the EU's Official Journal, is expected to lead to annual tariff savings of around €1.5 billion for EU exporters of steel and aluminium. For this extension to be fully effective, the US must complete its own procedures to extend its TRQ system for EU exports of steel and aluminium as of January 1, 2024. This prolonged suspension of tariffs provides businesses on both sides of the Atlantic with certainty, facilitating the smooth flow of trade.

Ongoing collaboration between the EU and the US also focuses on addressing global overcapacity and advancing the decarbonization of the steel and aluminium sectors within the framework of discussions on a Global Arrangement on Sustainable Steel and Aluminium (GSA). The mutual prolongation of tariff suspensions allows the necessary time and policy space to reach an agreement on the remaining GSA issues.

In 2018, the US imposed tariffs on €6.4 billion worth of European steel and aluminium exports. In response, the EU introduced rebalancing tariffs on US exports to the EU, amounting to €2.8 billion. In 2022, the EU fully suspended these measures until December 31, 2023, providing time to collaborate on a longer-term solution. The US replaced the Section 232 tariffs with a tariff-based quota system, using historical trade volumes. However, this resulted in above-quota EU steel and aluminium still being subject to tariffs.

In the year 2022, the EU shipped 3.8 Million Metric Tonnes (MMT) of steel to the US. From these shipments, 1.7 MMT were granted duty-free status under the US 232 Tariff-Rate Quotas (TRQs). Additionally, as per the information provided by the US administration, an extra 1.5 MMT of exclusions were bestowed upon EU exporters. In the case of aluminium, the EU exported 289 Thousand Metric Tonnes (“TMT”) to the US in 2022. However, only 146 TMT of EU exports received duty-free treatment under the US 232 TRQs. Furthermore, the US administration granted exclusions totaling 70 TMT to EU exporters, as per data shared with the European Commission.