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U.S.– E.U. REACH AGREEMENT ON SECTION 232 STEEL AND ALUMINUM TARIFFS

On Sunday, October 31, 2021, the United Sates and the European Union announced in a Joint Statement on Trade in Steel and Aluminum that the U.S. would remove the section 232 tariffs and the E.U. would suspend related tariffs on U.S. products. In addition to the removal of tariffs both will also suspend their related World Trade Organization disputes.

Following the joint statement an Announcement of Action on EU Imports Under Section 232 was released by the United States Trade Representative (USTR) office which outlined the specifics.

Steel Products:

Effective January 1, 2022, the United States will replace the existing 25 percent tariff on EU steel products under section 232 with a tariff-rate quota (TRQ). Under the TRQ arrangement, historically based volumes of EU steel products will enter the U.S. Market without the application of Section 232.

  1. TRQ Amount: The aggregate annual import volume under the TRQ is set at 3.3 MMT under 54 product categories and allocated on an EU member state basis in line with the 2015-2017 historical period. A breakdown of the said 54 product categories identified in Annex 1.
  2. Derivative Products: Imports of derivative articles of steel, as referenced in Proclamation 9980, 2 from the EU will not be subject to Section 232 duties.
  3. Eligible products: In order to be eligible for duty-free treatment under the quota, steel imports must be “melted and poured” in the EU according to current U.S. requirements and rules implementing this arrangement. An importer shall provide relevant documentation substantiating compliance with U.S. requirements. Failure to comply could result in remedies and/or penalties as provided for under U.S. law.
  4. Exclusions: The United States will maintain its exclusions process, as implemented under Section 232 of the Trade Expansion Act of 1962, available for steel products imported from the EU, but will not count imports of excluded steel products from the EU against the TRQ. The United States will extend the application of exclusions granted for and utilized in U.S. fiscal year 2021 for steel products imported from the EU for a period of two calendar years without the need to reapply, i.e., until 31 December 2023. 4 These exclusions will be available for the U.S. exclusion holder and corresponding EU exporter or exporters. No Section 232 duty will apply to these U.S. imports from the EU.
  5. Tariff Rate: Section 232 steel products from the EU that are within-quota will enter free of any Section 232 duty while all Section 232 steel products entering above-quota will continue to be subject to a Section 232 duty of 25 percent, provided that they are not subject to an exclusion as per point 4 above.

Aluminum Products:

Effective January 1, 2022, the United States will replace the existing 25 percent tariff on EU aluminum products under section 232 with a tariff-rate quota (TRQ). Under the TRQ arrangement, historically based volumes of EU steel products will enter the U.S. Market without the application of Section 232.

  1. TRQ Amount: The aggregate annual import volume under the TRQ is set at 18 thousand metric tons (TMT) for unwrought aluminum under two product categories, and 366 TMT for semi-finished (wrought) aluminum under 14 product categories. The import volumes will be allocated on an EU member state basis in line with the 2018-19 historical period, with the exception of foil (7607), where 2021 annualized data will be utilized. A breakdown of the said product categories is enclosed in Annex 2.
  2. Derivative Products: Imports of derivative articles of aluminum, as referenced in Proclamation 9980, from the EU will not be subject to Section 232 duties.
  3. Entry Documentation: An importer shall provide a Certificate of Analysis for each aluminum product entered into the United States, as required by current U.S. law and rules implementing this arrangement. Failure to provide this documentation could result in remedies and/or penalties as provided for under U.S. law.
  4. Exclusions: The United States will maintain its exclusions process, as implemented under Section 232 of the Trade Expansion Act of 1962, available for aluminum products imported from the EU.
  5. Tariff Rate: Section 232 aluminum products from the EU that are within-quota will enter free of any Section 232 duty, while all Section 232 aluminum products entering above quota will continue to be subject to a Section 232 duty of 10 percent, provided that they are not subject to an exclusion as per point 4 above.
  6. Administration: The TRQ is calculated for each year of the measure and administered on a semi-annual basis, with no more than 60 percent of the TRQ to be filled in the first half of the year. The United States will provide on a public website updated information on the utilization of the semi-annual quota for each product category.

The USTR has established a Fact Sheet with additional information about the arrangements on Global Steel and Aluminum.

If you have any questions, please contact your local Noatum Logistics representative.