US confirms extension of steel, aluminum TRQ for EU through 2025

The US has officially confirmed the extension of its tariff-rate quota scheme through the end of 2025 on steel and aluminum imports from the EU, a move that was expected after the EU recently extended its tariff suspension on US goods through March 31, 2025.

According to a statement released by the White House late Dec. 28, US President Joe Biden determined that specified volumes of eligible steel and aluminum articles from the EU “will no longer threaten to impair the national security and have decided to exclude such imports from the EU up to a designated quota from the tariff.”

The TRQ impacts the US’ 25% tariff on steel imports and 10% tariff on aluminum imports that have been in effect against most exporting countries, including the EU and its member countries, since 2018 under Section 232 of the Trade Expansion Act, a provision that allows tariffs for national security purposes. In response to the 2018 tariffs, the EU implemented what it called “rebalancing tariffs” on various US goods such as whisky and motorcycles.

The US has since removed the tariffs or replaced them with alternative arrangements, such as TRQs, for trade allies. In 2021, the Biden administration reached a deal with the EU that temporarily replaced the metal duties with the TRQ through the end of 2023. The EU, in turn, suspended its retaliatory tariffs for the same timeframe.

The US’ TRQ allows up to 3.3 million mt of steel, 18,000 mt of unwrought aluminum and 366,040 mt of semi-finished wrought aluminum to be imported duty-free from the EU each year. Certain other steel and aluminum products are completely exempt and do not impact the quota totals. Specific volumes within the quota are disbursed among the EU member nations and are based on historical US import volumes.

However, the EU still seeks the complete elimination of the tariffs and quotas, according to its Dec. 19 statement that confirmed its extension of the retaliatory tariff suspension on US goods.

The US imported about 4 million mt of steel products and 283,000 mt of aluminum products from the EU in 2022, according to US Commerce Department data.

Role of GASSA

As part of the original 2021 tariff-relief agreement between the US and EU, the two governments pledged to work toward a more permanent trade solution that would extend beyond 2023 and address both carbon emissions and global overcapacity in the steel and aluminum industries, especially in relation to third-party countries and governments. The potential deal has since been referred to as the Global Arrangement on Sustainable Steel and Aluminum, or GASSA.

The two sides were not able to come to a GASSA agreement by a mutually self-imposed deadline in October 2023, thereby raising concerns that tariffs would be reinstated. However, the US and EU released respective statements on Dec. 19, acknowledging the complexity of the GASSA negotiations and the willingness to continue cooperation. At the time, the EU announced its extension of the retaliatory tariff suspension with the understanding that the US would soon confirm its extension of the TRQ.

“During the past two years, the US and the EU have made substantial progress to identify the sources of non‑market excess capacity and the actions needed to address distortions resulting from that non-market excess capacity,” Biden said in the Dec. 28 White House statements. “ The US and the EU are continuing their discussions on global steel and aluminum arrangements to restore market-oriented conditions in their steel and aluminum sectors and support the reduction of the greenhouse gas emissions intensity of steel and aluminum across all modes of production.”

US groups supportive

US steel industry groups, which have long supported the Section 232 tariffs, expressed support for the extension of the TRQs and ongoing work on GASSA.

“The American steel industry strongly supports the administration’s efforts to establish new mechanisms to address effectively global non-market excess capacity in steel and the higher carbon intensity of imported steel versus clean American steel,” American Iron and Steel Institute CEO Kevin Dempsey said in a statement. “We look forward to continuing to work with the administration on these issues that remain critical to the future of both the US and EU steel industries.”

Similarly, Steel Manufacturers Association President Philip Bell said the TRQ extension was critical for continued cooperation on GASSA.

“The proclamation sets the stage for continued discussions on the proposed Global Arrangement on Sustainable Steel and Aluminum,” he said in a separate statement. “SMA supports the US government’s solution-focused approach toward an agreement that addresses both non-market excess capacity and reducing carbon emissions from around the world.”

Author Nick Lazzaro,