Trade Cases

Bell: Tariff Rate Quota on the Table in Trade Talks with EU
Written by Tim Triplett
September 9, 2021
There’s a good chance the Section 232 tariffs on steel imports from the European Union could be replaced by a tariff rate quota (TRQ) as soon as November as a result of trade talks now under way between officials from the U.S. and EU. The EU is strongly opposed to the Trump-era “national security” tariffs on steel and aluminum and has threatened additional retaliatory tariffs of its own on various goods unless the U.S. offers an alternative.
“It appears the two sides are looking seriously at a tariff rate quota,” said Steel Manufacturers Association (SMA) President Phil Bell in comments to Steel Market Update today.
SMA would support a TRQ under certain conditions, Bell said. For one, the exclusions to the Section 232 tariffs would need to be eliminated. Commerce has granted a large number of exclusions on products from countries all over the world, not just the EU. “If we let the additional volumes from the EU come in via a TRQ, those tons would have to be offset in some way,” Bell said.
Second, terms of the TRQ would have to be flexible to account for the differences between specific products. And third, the tonnages imported from EU countries would have to be measurable and verifiable. “We also hope the discussions talk about subsidies and what we can do together to decarbonize the global steel industry,” Bell added.
TRQs are usually set based on historical import periods. EU steel exports to the U.S. would be tariff-free up to a certain base level, after which a tariff would kick in. The import level and the tariff rate are subject to negotiation, but the duty on tonnages exceeding the quota could turn out to be more or less than the 25% rate under Section 232, Bell noted.
The two sides are working toward a Nov. 1 deadline to reach an agreement. “I am pretty confident that deadline will be met. This is a high priority for the administration. They have their A teams working on this,” Bell said.
Section 232, put in place by President Trump in 2018, was meant as a temporary fix against unfair import surges. It’s necessity as a safeguard has grown hard to defend by a domestic steel industry that is enjoying record sales and profits.
Will a TRQ pact with the EU be the first domino to fall, with other countries seeking the same treatment? “That’s hard to say,” said Bell. “The EU is a big ally, but there are a lot of bad actors out there where Section 232 still needs to apply – most notably China. But if we get a workable agreement here, this could serve as a potential roadmap for other countries.”
By Tim Triplett, Tim@SteelMarketUpdate.com

Tim Triplett
Read more from Tim TriplettLatest in Trade Cases

Leibowitz on trade: Trump’s reciprocal tariffs face mounting legal challenges
The tariffs amount to a wholesale transformation of US trade policy from one promoting increasing international interaction to one of restricting trade to serve national strategic goals.

Steel groups voice different takes on US-EU trade deal
US and European steel trade groups were at odds over their reaction to the recent trade deal President Trump brokered with the EU.

Here’s what’s up next in the big coated steel trade case
Attorneys representing domestic petitioners and foreign respondent companies have been busy filing case briefings and making rebuttals as the corrosion-resistant steel unfair trade investigations begin to wind down.

Price: Which countries get a ‘zonk’ in Trump’s primetime ‘Let’s Make a (Trade) Deal’ show?
As the president’s August 1 tariff deadline approaches, the “Let’s Make a Deal” game show returns to primetime (the Monty Hall version, of course). As the administration begins rolling out trade deals, we are starting to see what’s behind door number one and who is getting a “zonk.”

Trump says Canada deal might not happen: Report
President Trump said a negotiated deal with Canada might not occur, and all existing tariffs, along with those set to take effect soon, will stay in place, according to media reports.