US president Joe Biden has pushed back a deadline on steel and aluminium tariffs amidst ongoing negotiations between the country and the European Union (EU). The extension continues to suspend tariffs on European steel and aluminium for two years as the entities address overcapacity and low-carbon production.
This combined with the EU’s reciprocal 15-month suspension on tariffs on US goods will give both sides additional time to negotiate an acceptable global arrangement in the steel and aluminium industries, according to US trade representative Katherine Tai.
“By extending the EU’s steel and aluminium tariff rate quotas (TRQ) for an additional two years, we can continue negotiations on a forward-looking, high-standard arrangement, while providing predictability and stability to steel and aluminium workers and their families on both sides of the Atlantic,” said Tai.
“Maintaining viable steel and aluminium production at home is vital to U.S. national security, and our efforts with trading partners, including the EU, will continue to be guided by this tenet.”
Originally imposed by Donald Trump during his presidency, the EU was saddled with 25% import tariffs on EU steel and 10% tariffs on EU aluminium. The EU imposed retaliatory tariffs covering a wide range of US goods from motorcycles to liquor.
The American tariffs were later replaced by a TRQ system put in place by the Biden administration in December 2021.
The US and EU had been working to address excess metal production capacity in non-market economies, like China, and to promote greener steel. The discussions were meant to be resolved by year end but had stalled.
In a presidential proclamation, Biden said the two sides had made “substantial progress” and were “continuing their discussions.”
The TRQ currently allows up to 3.3M metric tons of EU steel and 384,000 metric tons of aluminium in tariff-free (reflecting past trade levels), with the tariffs applying if they exceed these amounts. The new exemption applies through 31 December 2025.
“The US and the EU are continuing their discussions on global steel and aluminium arrangements to restore market-oriented conditions in their steel and aluminium sectors and support the reduction of the greenhouse gas emissions intensity of steel and aluminium across all modes of production,” Biden said.
“These discussions are anticipated to include alternative measures to prevent imports of steel from the EU from threatening the national security of the US.