On Saturday, the United States and the European Union reached an agreement on section 232 duties being imposed because of global steel and aluminum excess capacity concerns.  The trading partners have agreed that the U.S. will adjust tariffs on steel and aluminum to allow elimination of certain U.S. section 232 duties, and the EU will suspend its retaliatory tariffs. While many details are yet to be released, the following guidelines are available:

• The U.S. will replace Section 232 tariffs with tariff-rate quotas (TRQs) for EU steel and aluminum products.
• The EU will suspend its retaliatory tariffs in response to the U.S. Sections 232 tariffs.
• Both the U.S. and EU agreed to coordinate on trade remedies and customs matters.
• Both partners agreed to further negotiate an arrangement for the steel and aluminum sectors through a technical working group that addresses non-market excess capacity and carbon production.
• The EU agreed to ensure market-oriented conditions in this sector. Reports are that the TRQs will begin on January 1, 2022, across 54 product categories, with an annual 3.3 metric ton limit.  Products that are currently covered by Section 232 exclusions are said not to count against the quotas. Those exclusions will automatically renew through the end of 2023.  For both steel and aluminum, derivative products will no longer be subject to tariffs or quotas.
• All products entered under the quota will have to be certified as being melted and poured in the EU.
• For aluminum, reports are that the tariff-free quota is 18,000 metric tons for unwrought aluminum, under 2 product categories, and 366,000 metric tons for semi-finished aluminum under 14 product categories.

Husch Blackwell LLP’s International Trade & Supply Chain team continues to monitor these developments closely and will provide updates as additional information becomes available.