On October 30, 2021, the United States and the European Union (“EU”) reached an agreement to replace the tariffs imposed under Section 232 of the Trade Expansion Act of 1962 (“Section 232”) on EU imports of steel and aluminum with a tariff-rate quota (“TRQ”) that is scheduled to take effect on January 1, 2022. The deal allows a certain volume of EU steel and aluminum to enter the United States each year without the application of Section 232 tariffs. Imports over that volume will be subject to Section 232 tariffs, which are currently 25 percent for steel imports, and 10 percent for aluminum imports.
According to details released by the Department of Commerce (“Commerce”), the TRQ is based on historical import values and will be allocated by product and by EU Member State. For steel, the TRQ will be broken down into 54 product categories, with the total annual amount set at 3.3 million metric tons per year, starting in 2022. The annual amount for the aluminum TRQ will be 18,000 metric tons for unwrought aluminum and 366,000 metric tons for semi-finished (wrought) aluminum. The quota levels for unwrought aluminum will be subdivided into two product categories, and the quota levels for semi-finished aluminum will be subdivided into fourteen product categories. The United States will conduct annual reviews to adjust the steel TRQ amount based on US demand using data from the World Steel Association, but at this point there is no similar provision to adjust the levels of the aluminum TRQ.