The U.S. Department of Commerce announced on October 31st that the existing tariffs on steel and aluminum imported from Europe are being dropped, and a quota system will take its place in the event of an unexpected surge of imports. In response, the E.U. is dropping its retaliatory tariffs on imported U.S. goods, which were set to increase on December 1st.
The new tariff rate quota will allow a certain volume of steel and aluminum produced in the E.U. to enter the U.S tariff-free before a new tariff of 25% on steel and 10% on aluminum goes into effect. While specifics on how much material will be allowed under the agreement have not been provided, the amount of steel that could enter the U.S duty-free is said to be 3.3 million metric tons annually.
“We fully expect this agreement will provide relief in the supply chain and drive down cost increases,” Commerce Secretary Gina Raimondo said.
The deal also places restrictions on products that are finished in Europe but use steel from China and other countries. Steel products must be entirely produced in the European Union to qualify for duty-free treatment.
The U.S. and E.U. will also be working together on environmental standards, focusing on cleaner steel being produced, and the global overcapacity in the steel industry.