The Lifting of the Tariff Section 232

The US and EU announced October 31st, 2021, that they had agreed to lift the US tariffs of 25% on imports of steel from EU and 10% on imports of aluminum from the EU, imposed under Section 232 of the Trade Expansion Act of 1962. In turn, the EU is lifting its own tariffs on products from the US and has agreed to limit exports of steel and aluminum to the US. On Jan. 1st, 2022 this agreement will become effective and apply to US imports made on or after that date.

 

For the steel to be eligible for tariff-free entry into the US, it must be melted and poured in the EU, effectively entirely produced in the EU. There will be an import limit from the EU by a Tariff Rate Quota or TRQ that allows duty free imports of qualifying EU steel up to a max of 3.3 million metric tons a year. Imports exceeding this quota will be subjected to a 25% tariff.

 

This TRQ will be administered on a quarterly basis. Any unused quota will roll over to the next quarter, or the following year. The TRQ will be on a first-come, first-serve basis for each product category. 

 

As for aluminum, the products eligible for tariff-free treatment, products must also be entirely produced within the EU. A Certificate of Analysis demonstrating the origin and place of manufacture will be required as proof of origination. 

 

The TRQ will be capped each year at 18,000 metric tons for unwrought aluminum under 2 categories, and 366,000 metric tons for wrought aluminum under 14 categories. Any import that exceeds the quota will be subjected to the 10% tariff.

 

The TRQ will be administered on a semi-annual basis. No more than 60% of the TRQ will be filled in the first half of the year. Unlike aluminum foil, which will be subjected to the 2021 annualized data, the quota import volumes will be allocated on EU member state basis with the 2018-19 historical period. 

 

When 2018 hit, commerce concluded that importation of certain steel and aluminum products impaired the national security of the US. The president at the time, Donald Trump imposed a 25% tariff on steel and aluminum imports. The Biden Administration, however, announced in May 2021 that it would attempt to find a trade impasse between the US and EU by the end of 2021.

 

Though no official statement has been made, Japan is currently reviewing the tariffs on their own steel and aluminum imports and may follow suit. 

 

Sobel Network Shipping monitors the changes to these programs for classification and duty assessment as well as receives notices from CBP via their CSMS management system and is focused on ensuring compliance with these changes.