On October 31, 2021, the Office of the United States Trade Representative (USTR) announced that the United States would be replacing the existing 25% tariff on EU steel and 10% tariff on EU aluminum under Section 232 with a tariff-rate quota (TRQ). As such, eligible products that are within the quota will be able to enter free of any Section 232 duties. Products that enter the U.S. above the quota will continue to be subject to the 25% tariff on steel and 10% tariff on aluminum. Both TRQs for each product are set to take effect as of January 1, 2022.
In their announcement, USTR also noted that the U.S. will maintain its exclusion process, as implemented under Section 232, for both steel and aluminum. Excluded products will not count against the TRQ nor will Section 232 duties apply to these imports. For steel exclusions only, the U.S. will also be extending the application of exclusions granted and used in the U.S. for Fiscal Year 2021 for steel products imported from the EU and will not require additional reapplication for a period of two calendar years – i.e., until December 31, 2023. These exclusions will be for U.S. exclusion holders and to corresponding EU exporter(s). In their announcement, USTR did not include any language about additional benefits for aluminum exclusions which signifies that those exclusions will still require reapplication on an annual basis.
For steel imports from the EU, the annual import volume is set at 3.3 million metric tons (MMT) under 54 product categories. This amount will also be allocated on an EU member state basis and will be in line with historically based volumes from 2015-2017. Steel product imports must be “melted and poured” in the EU in accordance to U.S. requirements and rules to be eligible as well. Calculation of the TRQ will take place each year on a quarterly basis. Any unused TRQ volume from the first quarter of that specific year – and only up to 4% of the allocated quota for that quarter – will roll over to the third quarter of that year. Unused TRQ volumes between the second quarter and the fourth quarter as well as between the third quarter and first quarter of the next year, are subject to the same roll-overs. The TRQ will be allocated on a first-come, first-served basis for each of the 54 categories from each EU member state, and the U.S. will provide updated information regarding the use of the quarterly quota on a public website.
For aluminum imports from the EU, the annual import volume is set at 18 thousand metric tons (TMT) for unwrought aluminum under two product categories, and 366 TMT semi-finished (wrought) aluminum under 14 product categories. The amount will be allocated on an EU member state basis similar to the quota for steel; however, the volumes will be in line with 2018-2019 historical levels – with the exception of foil, where 2021 annualized data will be used. Importers of aluminum steel will need to provide a Certificate of Analysis for each aluminum product. The TRQ for aluminum will be administered on a semi-annual basis, with no more than 60% of the TRQ to be filled in the first half of a given year.
The announcement is available here.
For more information on Section 232 tariffs and Tariff-Rate Quotas, contact our team and see previous posts below.