Trade Cases
US and EU to Discuss 'Global Arrangement' for Steel and Aluminum
Written by Becca Moczygemba
October 9, 2023
The US and European Union will continue trade talks on Friday, Oct. 20, according to a statement from the European Council.
President Joe Biden will host Charles Michel, president of the European Council, and Ursula von der Leyen, president of the European Commission, at the White House for a US-EU Summit.
Background
The original Section 232 tariffs that went into effect in March 2018 applied 25% and 10% tariffs, respectively, on specific steel and aluminum imports.
In October 2021, the EU and US met and released a joint statement. The goal: “to re-establish historical transatlantic trade flows in steel and aluminum, and to strengthen their partnership.”
The 2021 arrangement replaced the original tariffs with a tariff rate quota (TRQ) system.
“In a demonstration of renewed trust, and reflecting long-standing security and supply chain ties, the United States will not apply section 232 duties and will allow duty-free importation steel and aluminum from the EU at a historical-based volume and the EU will suspend related tariffs on US products,” the statement said. However, the two sides agreed to continue discussions and conclude them within two years.
Why It Matters
The two sides have a self-imposed Oct. 31 deadline. If they fail to reach an agreement by the deadline, the parties could reimpose tariffs on each other’s goods. And increased tariffs could mean increased prices for US citizens.
“There’s a lot of agreement on both the carbon intensity issue and the excess capacity issue,” Kevin Dempsey, president and CEO of the American Iron and Steel Institute (AISI), told SMU.
Dempsey highlighted that one of the challenges is having both parties, who do things differently, come to an agreement. “Hopefully we’ll make some progress here in the next few weeks,” said the AISI president.
“We hope these discussions will build a framework for continued dialogue toward a meaningful agreement that remains ambitious, particularly in the areas of non-market excess capacity and lowering carbon emissions,” said Philip K. Bell, president of the Steel Manufacturer’s Association, in an email to SMU.
While progress on Oct. 20 is possible, Dempsey says the US is awaiting data from the International Trade Commission. However, the data will not be available until January 2025. “The data will be used to calculate carbon emissions intensity for domestic steel and aluminum production,” Dempsey said.
Becca Moczygemba
Read more from Becca MoczygembaLatest in Trade Cases
Mexico considers stiff tariffs for steel, autos, and other imports
Mexico is considering imposing steep tariffs on imports of steel, automobiles, and over 1,400 other products. Its target? Countries with which it does not have free trade agreements, mainly China, India, Thailand, and other South Asian nations.
Leibowitz: With ‘reciprocal’ tariffs struck down again in court, what happens next?
President Trump’s “reciprocal” tariffs under the International Emergency Economic Policy Act (IEEPA) were struck down again, this time on Aug. 29 by the Court of Appeals for the Federal Circuit (CAFC). The legal and policy mess continues, with the next stop being the US Supreme Court.
Market unfazed by US circuit court’s IEEPA decision
Repealing any reciprocal tariffs placed by President Donald Trump on US imports of direct reduced iron (DRI), iron ore, hot-briquetted iron (HBI), and pig iron would have only a nominal impact on the US steel market, market participants said.
ITC votes to keep HR duties after sunset review
The US government determined this week that hot-rolled steel imports from a handful of countries continue to threaten the domestic steel industry.
Steel Summit: Zekelman advocates for ‘Fortress North America’
Barry Zekelman has a unique vantage point from which to view today’s trade landscape. A Canadian national who owns operations in both the US and Canada, he has also had dialogue with both Canadian and American administrations.