On October 31, the U.S. announced that it will lift its Section 232 tariffs on aluminum and steel products imported from the EU. As part of the agreement, the EU agreed to suspend the tariffs it had placed on certain U.S. goods in retaliation against the Section 232 tariffs. Both sides further agreed to suspend their World Trade Organization (WTO) disputes against each other regarding these tariffs.

According to the Fact Sheet issued by the Office of the United States Trade Representative (USTR), the Section 232 tariffs will be replaced with Tariff Rate Quotas (TRQ). Specific details on the application of the TRQ’s to the 54 steel product categories and 14 aluminum product categories can be found here.

In the announcement, the USTR stated the following principals will guide future U.S.-EU cooperation

Replacement of Section 232 tariffs with tariff-rate quota (TRQ). The United States will replace the existing tariffs on EU steel and aluminum products under Section 232 with a TRQ under Section 232. Under the TRQ arrangement, historically-based volumes of EU steel and aluminum products would enter the U.S. market without the application of Section 232 tariffs to meet the demands of downstream users.

Agreement to cooperate in trade remedies and customs matters and development of additional actions. Both sides agreed to expand their coordination involving both trade remedies and customs matters, and to meet regularly to consult and develop additional actions to address non-market excess capacity in these sectors.

Negotiation of global steel and aluminum arrangements that restore market-oriented conditions and address carbon intensity. The U.S. and EU resolved to negotiate future arrangements for trade in the steel and aluminum sectors that take account of both global non-market excess capacity as well as the carbon intensity of these industries. The U.S. and the EU agreed to form a technical working group to enhance their cooperation and facilitate negotiations on these arrangements, and will invite like-minded economies to participate in the arrangements.

Lifting of the EU’s retaliatory tariffs and suspension of disputes before panels of the World Trade Organization. The EU will suspend the additional duties imposed on U.S. goods, and the U.S. and the EU agreed to suspend the disputes they have initiated against each other regarding the U.S. Section 232 measures and the EU’s additional duties in light of the arrangements for moving forward.

Other measures to ensure market-oriented conditions in the EU market. The EU will ensure market-oriented conditions in its market, including through the application of safeguards and other appropriate measures.

The White House also issued a Fact Sheet which addressed the agreement’s commitment to combat climate change, stating “This announcement delivers a major win in the fight to address the climate crisis while protecting our workers and industry, and enabling them to compete in the global marketplace. The President believes that climate action must mean good jobs – and today’s announcement demonstrates that we can work with our partners and allies to both reduce emissions, and protect and create good-paying union jobs at home.”

V. Alexander will continue to monitor this issue and provide updates as needed.

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