From Fred Waite and Kim Young, AWPA Counsel
The United States and the European Union have jointly released the attached document which contains the general terms of the agreement regarding the Section 232 steel and aluminum tariffs.
Following are the principal terms of the steel agreement:
- The agreement is a tariff-rate quota (TRQ) under which within-quota steel products from the EU enter the United States without the Section 232 tariffs. Steel products above the quota amounts will be subject to the Section 232 tariff of 25%.
- The initial annual quota for steel products from the EU is 3.3 million metric tons.
- The agreement goes into effect on January 1, 2022. NOTE: We assume that entries made on or after January 1, 2022, are subject to the terms of the agreement, but we expect further clarification of this and other points.
- TRQs will be allocated to each EU member state per product category. There are altogether 54 steel product categories, but not every EU member state has exported all 54 product categories. We assume that EU member states will receive TRQ allocations only for those products that it exported to the United States during the 2015—2017 reference period.
- To be eligible for duty-free treatment under the quota, the steel product must be melted and poured in the EU.
- The TRQ will be administered on a quarterly basis.
- The U.S. will maintain a website with updated information on the utilization of the quarterly quota for each product category.
- The TRQ will be allocated on a first-come, first-served basis for each steel product category from each EU member state. Unused quota will roll over into subsequent quarters as stipulated in item 6 of the steel section of the attached document.
- The TRQ will be adjusted on the basis of U.S. apparent consumption of steel products in accordance with the formula in item 7 of the steel section of the attached document.
- The U.S. will maintain its exclusion request process for steel products from the EU, and granted exclusions will not be charged against the TRQ. In addition, exclusions granted and used for the period of October 1, 2020—September 30, 2021 will automatically be extended until December 31, 2023 (with no renewal requests required but effective only for the original requestor).
- Derivative steel products from the EU will not be subject to Section 232 tariffs.
Although the announcement does not specifically address the issue, applicable antidumping (AD) and countervailing (CVD) duties will continue to be assessed on steel and aluminum imports from the EU.
The following matters remain outstanding:
- The quantity of the TRQ for each category of steel and aluminum products. The agreement sets out the general formulae for calculating the TRQ amounts, but not the precise quantities per EU member state.
Item 1 in the steel section states the quota is “allocated on an EU member state basis in line with 2015-2017 historical period”.
Item 1 in the aluminum section states that the quota “will be allocated on an EU member state basis in line with the 2018-19 historical period, with the exception of foil (7607), where 2021 annualized data will be utilized.”
- Whether granted exclusions for aluminum products will be extended in the same manner as exclusions for steel products.
AWPA is following this issue and will provide more information as it becomes available.
You can read the announcement here.