US, EU extend metal duty exemptions to 2025 as GASSA talks continue

Author Nick Lazzaro

The US and EU will extend the suspensions of their respective tariffs and retaliatory tariffs involving steel, aluminum and other goods beyond January 2024 after agreeing to continue work on a larger trade deal that was expected to be finalized this year, the governments said Dec. 19.

The EU will continue to pause its retaliatory tariffs until March 31, 2025. Meanwhile, the US plans to officially extend the timeline of its duty-free quota program on EU metal imports in the coming days.

The dual moves will provide the governments additional time to reach a more comprehensive trade agreement, known as the Global Arrangement on Sustainable Steel and Aluminum, or GASSA, to address both carbon emissions and global overcapacity in the steel and aluminum industries, especially in relation to third-party countries.

“We are giving our importers and exporters the market stability and business confidence to continue to trade smoothly,” Valdis Dombrovskis, the EU’s executive vice president and trade commissioner, said in a statement. “Second, it provides us with the necessary space to continue pursuing the full and permanent removal of 232 tariffs on EU exports, as well as working on addressing global overcapacity and decarbonization of the steel and aluminum industries.”


History of tariffs
The US introduced a 25% tariff on steel imports and a 10% tariff on aluminum imports from most countries in 2018 under Section 232 of the Trade Expansion Act, a provision that allows tariffs for national security purposes. In response, the EU imposed what it called “rebalancing tariffs” on various US goods.

The US has since repealed or modified the metal tariffs for many of its trade allies. In 2021, the US replaced the 232 tariffs with a tariff-rate quota scheme for metal imports from the EU that would remove the duties for certain volumes of shipments. In turn, the EU suspended its rebalancing tariffs.

The dual tariff suspensions were given a provisional deadline of Jan. 1, 2024, with the understanding that the tariffs could resume if the GASSA was not reached. The US and EU ultimately failed to reach an agreement on the GASSA this year.

US Trade Representative Katherine Tai welcomed the EU’s tariff suspension and acknowledged the need to extend the timeframe on the GASSA.

“These are technically complex negotiations, and the United States remains committed to our partnership with the EU and to staying at the table to continue the progress we have made so far,” she said in a separate statement.

“Since we began our negotiations in 2021, two new wars have started and global economic disruptions continue,” she added. “The spirit of cooperation and partnership forged between President Biden and President von der Leyen is embodied in our efforts to address our shared global challenges.”



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.



Industry lauds move, but EU groups call to end 232
Industry associations in both the US and EU welcomed the decision to suspend tariff programs and sustain work on the GASSA.

Axel Eggert, director general of the European Steel Association, or EUROFER, said the Dec. 19 announcements allow for continued cooperation to foster trade relations and tackle global industry challenges.

“The [GASSA] framework will need to address global non-market excess capacity and carbon intensity in the steel industry — which are the two existential challenges affecting the sector — through close EU-US policy alignment,” he said in a statement. “A structural, long-lasting solution to the Section 232 dispute will be a natural part of such framework.”

The American Iron and Steel Institute echoed the sentiment expressed by EUROFER.

“AISI continues to support the negotiation of a new international arrangement that will effectively address both non-market excess capacity in steel and the carbon intensity of steel imported from around the world, as these two related issues are critical to the future of both the US and EU steel industries,” AISI president and CEO Kevin Dempsey said in a statement.

However, the mutual tariff suspensions represent a temporary solution, according to Thilo Brodtmann, executive director of the Germany-based Mechanical Engineering Industry Association.

“It is clear that a 15-month extension of the suspension of punitive tariffs will not be enough to improve trade relations between the EU and the US in the long term,” he said. “The industries on both sides of the Atlantic need a clear political signal, especially in view of the upcoming elections in the US and Europe, that the trade barriers for steel and aluminum will be permanently removed and another costly trade dispute can be prevented.”