Biden Administration Adjusts Section 232 Tariffs For EU Countries
As Connecting the Dots reported previously, the Biden administration reached a deal with the European Union (EU) regarding the United States’ Section 232 steel and aluminum tariffs. On December 27, President Joe Biden issued two proclamations related to that deal.
The proclamations set a quarterly tariff rate quota (TRQ) so that the first 3.3 million metric tons of steel imported into the United States will not be subject to the Section 232 penalties put into place by the Trump administration. Any steel imported above the quota will be subject to the 25 percent tariff rate set by the previous administration. The approved aggregate TRQ volume for aluminum articles is 18,000 metric tons of unwrought aluminum and 366,040 metric tons of semi-finished wrought aluminum. Any imports above that level will be subject to the 10 percent tariff put in place by the Trump administration.
The Biden administration said only steel melted and poured in the EU will be eligible for inclusion under the quota, which means steel produced in China and sent to Europe to be finished will still be subject to the 25 percent tariff.
The agreement took effect January 1, 2022 and will last through 2023. Over the next two years, the United States and EU will continue negotiations on global steel and aluminum arrangements “to restore market-oriented conditions and support the reduction of carbon intensity of steel and aluminum across modes of production,” the proclamations said. These negotiations should conclude by October 31, 2023.
Read the steel proclamation here and the aluminum proclamation here.
MSCI is reporting this news for members’ information only. As a reminder, MSCI consistently has argued that global overcapacity and other unfair trading practices, particularly by China, have harmed the U.S. steel and aluminum markets. To address this circumvention, in 2017 MSCI advised federal officials to provide relief for producers up and down the supply chain and to consider the consequences of any new trade policy, including: the economic impact of global overcapacity on the entire domestic metals supply chain; transition times and implementation rules to any new policy; availability of domestic metals to meet U.S. national security needs, as well as general industrial and consumer demand; and trade flows under current free trade agreements, including the United States Mexico Canada Agreement (USMCA). MSCI also asked that Canada and Mexico be excluded from any trade penalties.