The Commerce Department and the Office of the U.S. Trade Representative (USTR) are expected to announce an agreement with the United Kingdom to ease Section 232 tariffs on its steel exports, according to sources familiar with the matter.
The deal, slated to go into effect on June 1, is expected to be announced at approximately 5 pm Eastern Time, they said.
The pact means that the U.K. will drop retaliatory measures against exports of U.S. goods such as whiskey, motorcycles and blue jeans, sources said.
It will be broadly similar to deals already reached with the European Union and with Japan in that it will feature a tariff-rate quota, or TRQ.
The TRQ deal with the UK will make 500,000 metric tonnes of steel available for export to the U.S. free of Section 232 tariffs of 25%. That amount is based on imports volumes from 2018 and 2019, sources said.
The 500,000-tonne TRQ will be divvied up among the same 54 product categories that were used in the deals with the EU and Japan. Exclusions to Section 232 already granted to the UK will count against that total.
The deal will feature melted-and-poured language, as did the TRQ pacts negotiated with Japan and the EU. One new wrinkle is that the UK deal will feature a carve out for approximatley 38,000 tonnes of steel melted and poured in the UK to be shipped to the EU for further processing.
Another new development is that the agreement will feature language regarding subsidies or transshipments of Chinese steel. If UK steel is found to benefit from such supports – according to a third-party audit – those tons could be removed from the TRQ and subject to 25% Section 232 tariffs, sources said.
The talks with the UK come after the U.S. and the EU agreed to a tariff-rate quota (TRQ) in late October. The TRQ deal, which resulted in a soft quota instead of blanket 25% tariffs on European steel, went into effect at the beginning of this year.
And the U.S. on February 8 announced that a deal had been reached with Japan to ease Section 232 national security tariffs on steel imports from that key U.S. ally. That agreement will go into effect on April 1.
The U.K., with whom talks began in January, is a much smaller steel supplier to the U.S. compared to the EU and Japan.
The U.S. imported 272,079.4 tonnes from the U.K in 2021. That compares to nearly 1 million tonnes from Japan last year, according to Commerce Department figures.
The Commerce Department and USTR did not respond to requests for confirmation for this article on Tuesday afternoon.
By Michael Cowden, Michael@SteelMarketUpdate.com
Michael CowdenRead more from Michael Cowden
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