US, EU reach steel and aluminum truce

The United States Department of Commerce says the U.S. and the European Union have reached an arrangement meaning in part that the U.S. “will adjust the tariffs on steel and aluminum to allow duty-free trade at a sustainable historic level, and the EU will suspend its retaliatory tariffs.”

The retaliatory tariffs had involved a range of U.S.-made products including aircraft, motorcycles and distilled spirits.

“The United States looks forward to partnering with other trading partners and key stakeholders to address the common global challenge of steel and aluminum excess capacity,” the Commerce Department states in an Oct. 31 news release.

As part of the agreement, the U.S. plans to replace the existing 25 percent tariff on EU steel and 10 percent tariff on its aluminum products under Section 232 with a tariff-rate quota (TRQ) system. Under the TRQ arrangement, what the Commerce Department calls historically-based volumes of EU steel and aluminum products would enter the U.S. market without a tariff “to meet the demands of downstream users.”

Those downstream users have included numerous consumers of steel and aluminum, such as those in the  beverage can sector and in the automotive and aerospace sectors on the aluminum side.

Also Oct. 31, the Department of Commerce released a statement saying it was “consulting closely on bilateral and multilateral issues related to steel and aluminum” with the government of the United Kingdom. That national officially withdrew from the EU after the Section 232 tariffs were put in place. The department issued a similar message regarding consultations with Japan.