In a move to foster ongoing negotiations and collaboration, U.S. President Joe Biden announced on Thursday the extension of the suspension of tariffs on European Union steel and aluminum for an additional two years. This decision underscores the commitment of both the United States and the European Union to finding comprehensive solutions to address challenges related to overcapacity and promote low-carbon production in the metals industry.
The initial suspension, implemented in January 2022, saw the U.S. suspending import tariffs of 25% on EU steel and 10% on EU aluminum, replacing measures imposed by former President Donald Trump. The alternative tariff rate quota (TRQ) system was introduced, providing a framework for continued negotiations.
In response to the U.S. tariff suspension, the EU reciprocated by shelving tariffs that affected a range of U.S. products, including Harley Davidson motorcycles, bourbon whiskey, and power boats. These reciprocal measures will remain in place until 2025, aligning with both sides' post-election timelines.
The key focus of the negotiations revolves around addressing excess metal production capacity, particularly in non-market economies like China, and advancing greener steel production practices. While the discussions were initially intended to conclude by 2023, progress had stalled, prompting the extension of the tariff suspension.
President Biden, in a presidential proclamation, acknowledged the "substantial progress" achieved in the ongoing talks and highlighted that both parties were "continuing their discussions." The tariff suspension allows for a tariff-free import quota, permitting up to 3.3 million metric tons of EU steel and 384,000 tons of aluminum into the United States, reflecting historical trade levels. Any additional amounts beyond these quotas will be subject to tariffs. This extended exemption remains in effect until December 31, 2025.
Crucially, Biden maintained tariffs at their existing levels for non-EU countries, emphasizing the administration's commitment to a balanced and collaborative approach to international trade.
This extension of the tariff suspension underscores a positive trajectory in U.S.-EU trade relations, emphasizing a commitment to diplomatic negotiations and cooperative solutions in addressing shared economic challenges.
