The US and the EU have agreed to extend the suspension of reciprocal tariffs in the context of the steel and aluminum dispute until March 31, 2025.
The parties met on October 20 this year to o find a way to permanently end the 25 percent tariff on US steel imports and 10 percent tariff on aluminum first imposed in 2018 under Section 232 but failed to reach an agreement.
European Commission said that the extension will result in EU steel and aluminum exporters saving approximately €1.5 billion in tariffs annually and the US must complete its own procedures to extend its quota system for EU exports of steel and aluminum as of January 1, 2024. The Commission also noted that the EU will continue to engage constructively with the US to preserve its legal rights and remove US 232 tariffs on EU exports for good. Work between the EU and the US also continues on addressing global overcapacity and decarbonization of steel and aluminum sectors.
The EU has suspended its measures on goods including motorcycles and whisky in December 2023, while the US replaced its duties with a tariff quota system. Additionally, the World Trade Organization ruled last year that the tariffs were against global trade rules.
European Steel Association (EUROFER) has welcomed the extension. “The framework will need to address global non-market excess capacity and carbon intensity in the steel industry - which are the two existential challenges affecting the sector - through close EU-US policy alignment”, said Axel Eggert, director general of EUROFER.
On the other said of the Atlantic, American Iron and Steel Institute (AISI) is also pleased with the decision. “AISI continues to support the negotiation of a new international arrangement that will effectively address both non-market excess capacity in steel and the carbon intensity of steel imported from around the world, as these two related issues are critical to the future of both the US and EU steel industries”, Kevin Dempsey, president and CEO of AISI commented.