EU Section 232 Retaliatory Tariffs Won't Return in 2024; Additional 232 Exclusions to Be Granted

The U.S. will grant new Section 232 exclusions for steel and aluminum imports from the EU as part of a deal that will also extend the tariff rate quotas on EU steel and aluminum and avoid EU retaliatory tariffs on U.S. exports.

The EU said TRQs covered less than half of the 3.8 million metric tons of steel it exported to the U.S.; 1.5 million metric tons are covered by exclusions. It said that about half of the 289,000 metric tons of aluminum it exported to the U.S. came in under the TRQs. Only 70,000 metric tons of aluminum received exclusions.

Imports of goods covered by Section 232 from the EU are managed through a TRQ system that limits imports by product and by country and administers the quotas quarterly. The EU had asked for that TRQ system to be applied across the whole EU, and for the volumes to be filled at least twice a year.

The EU announced Dec. 19 that it will continue to suspend its retaliatory tariffs on motorcycles, liquor and other products -- originally chosen because then-House Speaker Paul Ryan's home state of Wisconsin included Harley-Davidson, and then-Senate Majority Leader Mitch McConnell's home state of Kentucky produces bourbon and whiskey. This suspension will last through March 31, 2025.

Originally, the suspension and the TRQs were going to sunset at the end of this year; during the two-year period, negotiators were supposed to find a way to restrict trade in their markets for steel and aluminum made with nonmarket-based overcapacity, and to favor metals made with lower carbon emissions. The two sides weren't able to reach an agreement on this Global Arrangement on Steel in time.

For the past two years, the U.S. and the EU “have been engaged in critically important negotiations. Our goal is to forge a forward-looking arrangement that will allow us to join forces economically to incentivize fair and clean production and trade in the steel and aluminum sectors," U.S. Trade Representative Katherine Tai said in a statement after the EU announcement. “These are technically complex negotiations and the United States remains committed to our partnership with the EU and to staying at the table to continue the progress we have made so far."

The EU wrote that it will "will continue to engage constructively with the US to preserve its legal rights and remove US 232 tariffs on EU exports for good." It said work continues on addressing global overcapacity and decarbonization of steel and aluminum sectors in the context of discussions on a Global Arrangement on Sustainable Steel and Aluminum. "The mutual prolongation of tariff suspensions provides the necessary time and policy space to find agreement on the remaining GSA issues," the EU said.

The American Iron and Steel Institute said it welcomes the agreement to extend the TRQs and for the EU to keep its tariff pause "to allow for further negotiations toward the proposed Global Arrangement on Sustainable Steel and Aluminum."