United States, European Union Fail To Reach Agreement On Section 232 Metals Tariffs

Talks between the United States and European Union (EU) regarding the U.S.’s Section 232 tariffs reportedly have reached a stalemate. U.S. President Joe Biden, European Commission President Ursula von der Leyen, and European Council President Charles Michel had been hoping to announce a deal on the Global Arrangement on Sustainable Steel and Aluminum (GSA) at a summit that happened last week.

Failure to reach an agreement would mean penalties on $10 billion in exports between the EU and United States would automatically come back into force at the start of 2024.

According to Bloomberg, negotiators “were unable to bridge differences regarding whether the United States would provide a clear path to remove the tariffs and tariff-rate quotas.” The EU wants to permanently end the Section 232 tariffs on EU exports while the United States wants to retain the option of using them in the future in case the EU does not adequately implement the provisions in an agreement.

A draft statement seen by Bloomberg did say the sides made “substantial progress to identify the sources of non-market excess capacity” and “achieved a better understanding of the tools to address the emissions intensity of the steel and aluminum industries.” The two sides will continue negotiations through the end of the year, at least.

As a reminder, when it comes to Section 232 tariffs, Connecting the Dots reports developments for members’ information only.

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, MSCI has 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.

Click here to review all of MSCI’s advocacy on Section 232 tariffs.