On December 28, 2021, President Joseph Biden issued two proclamations – Adjusting Imports of Steel into the United States and Adjusting Imports of Aluminum into the United States. In each proclamation, the president acknowledged that:
“the United States has successfully concluded discussions with the EU [European Union] on behalf of its member countries on satisfactory alternative means to address the threatened impairment of the national security posed by [steel and aluminum] articles imports from the EU. The United States and the EU have agreed to expand coordination involving trade remedies and customs matters, monitor bilateral steel and aluminum trade, cooperate on addressing non-market excess capacity, and annually review their arrangement for alternative means and their ongoing cooperation.”
The proclamations also state that the United States and the EU will continue negotiations on global steel and aluminum arrangements “to restore market-oriented conditions and support the reduction of carbon intensity of steel and aluminum across modes of production.” These negotiations should conclude by October 31, 2023. For additional details on the U.S.-EU agreement on the removal of Section 232 duties on steel and aluminum imports, see Update of November 1, 2021.
Notably, the proclamations formalize the implementation of a tariff-rate quota (TRQ) that will restrict the quantity of steel and aluminum articles imported into the United States from the EU without the application of the Section 232 tariffs imposed previously by the Trump administration. The proclamations also clarify that steel articles melted and poured in the EU are eligible for in-quota treatment and that aluminum articles accompanied by a certificate of analysis are eligible for in-quota treatment.
The TRQs on steel and aluminum imports from the EU will remain in place through December 23, 2023, and the United States will monitor the implementation and effectiveness of the TRQs. The approved aggregate TRQ volume for steel articles is 3.3 million metric tons annually; the approved aggregate TRQ volume for aluminum articles is 18,000 metric tons of unwrought aluminum and 366,040 metric tons of semi-finished wrought aluminum. Imports of steel and aluminum articles from member countries of the EU in excess of the TRQ quantities will remain subject to the Section 232 duties. The TRQ process will also apply to imports of derivative steel and aluminum articles previously identified under Proclamation 9980.
The proclamations also state that the United States has agreed to renew for two calendar years all exclusions that were granted and utilized to import steel products tariff-free from the EU in FY2021 (October 1, 2020 through September 30, 2021). The renewed exclusions will be for “an annual volume equal to that volume imported from a member country of the EU pursuant to the exclusion in Fiscal Year 2021.” This allowable renewal does not preclude an importer from seeking additional exclusions under the Section 232 product exclusion process. Also, while steel articles from a member country of the EU imported under a product exclusion do not count against the TRQ under the agreement in place between the United States and the EU for steel articles, the aluminum proclamation clearly states that aluminum articles from a member country of the EU imported under a product exclusion will count against the in-quota volume of the aluminum TRQ.
The Cargo Systems Messaging Service (CSMS) of U.S. Customs and Border Protection (CBP), CSMS #50533999, currently states that only EU steel and aluminum products subject to TRQs on January 1, 2022 will enter the U.S. market without the application of Section 232 tariffs. CSMS #50533999 refers users to the two proclamations for further details. The proclamation pertaining to adjusting steel imports does note that “[o]n a regular basis, the Department of Commerce shall publish on its website the volume of steel articles imported” under exclusions and the TRQ. While the proclamation pertaining to aluminum imports is silent on tracking the volume of aluminum imports, it is hoped that the Department of Commerce will also publish this data.
The proclamations direct the Department of Commerce to issue a notice in the Federal Register no later than February 10, 2022, seeking comments from interested parties on the Section 232 steel and aluminum exclusion processes. Issues for comment include the responsiveness of the exclusion process to market demand and enhanced consultation with U.S. firms and labor organizations. Within 60 days after the close of the comment period of this notice, the Department of Commerce must issue a proposed regulation revising the exclusion process as deemed appropriate following consideration of such comments. A Thompson Hine SmarTrade post will be published upon the issuance of this Federal Register notice.