Today, United States Trade Representative Katherine C. Tai and United States Secretary of Commerce Gina M. Raimondo announced a new 232 tariff agreement with the United Kingdom to allow historically-based sustainable volumes of U.K. steel and aluminum products to enter the U.S. market without the application of Section 232 tariffs. In addition to novel smelt and cast requirements on aluminum, this deal also requires that any U.K. steel company owned by a Chinese entity must undertake an audit of their financial records to assess influence from the People’s Republic of China government. The results of these audits must also be shared with the United States.

Ambassador Katherine Tai released the following statement: “The deal announced today delivers on President Biden’s vision to work with our allies and partners to address shared challenges 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 U.K. eliminating the retaliatory tariffs against the United States, we have also agreed to continue engaging on the threat posed by carbon intensive non-market excess capacity in the steel and aluminum industries”. “Throughout these negotiations and our successful effort to resolve the Boeing-Airbus dispute last year, Secretary of State for International Trade Anne-Marie Trevelyan and Secretary of State for Foreign, Commonwealth and Development Affairs Liz Truss have been thoughtful, honest partners. 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.”

Under the framework of this agreement, which becomes effective on June 1, 2022, and similar to other Section 232 agreements the U.S. has entered into with Japan and the EU, the United States will replace the existing Section 232 25% tariff on UK steel products with a tariff-rate quota (TRQ).

For steel, historically-based volumes of UK steel products will enter the U.S. market without the application of Section 232 tariffs as follows:
> The aggregate annual import volume under the TRQ is set at 0.5 million metric tons (MMT) for 54 product categories and allocated in line with the 2018-2019 historical period. Steel products from the UK subject to the Section 232 tariff that are within the quota will enter free of any Section 232 tariff, while all steel products subject to the Section 232 tariff entering above the quota will continue to be subject to the 25% tariff.
> Imports of derivative articles of steel will not be subject to the Section 232 tariff.
> To be eligible for Section 232 duty-free treatment under the quota, steel imports must be “melted and poured” in the UK according to current U.S. requirements.
> The United States will maintain its steel product exclusion process.

For aluminum, historically-based volumes of UK aluminum products will enter the U.S. market without the application of Section 232 10% tariffs as follows:
> The aggregate annual import volume under the TRQ is set at 0.9 thousand metric tons (TMT) for unwrought aluminum under two product categories and at 11.4 TMT for semi-finished (wrought) aluminum under 12 product categories. The import volumes will be allocated in line with the 2018-19 historical period, with the exception of foil (7607), where 2021 annualized data will be utilized. Aluminum products subject to the Section 232 tariff from the UK that are within the quota will enter free of any Section 232 tariff, while all aluminum products subject to the Section 232 tariff entering above the quota will continue to be subject to the 10% tariff.
> Imports of derivative articles of aluminum will not be subject to a Section 232 tariff.
> An importer must provide a certificate of analysis for each aluminum product entered into the United States, as required by current U.S. law.
> The United States will maintain its aluminum product exclusion process.

The full text of the announcement detailing the specifics of the agreement can be found here.

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