On March 22, 2022, the United States and the United Kingdom reached agreement on allowing “sustainable volumes” of UK steel and aluminum products to enter the U.S. market without the application of Section 232 tariffs. The Joint Statement notes that both the United States and UK will monitor steel and aluminum trade between the countries and cooperate on non-market excess capacity “to address issues relating to unfairly traded imports and surges in imports of products, and to ensure domestic industries operate in market-oriented conditions.”
Under the framework of the agreement, effective on June 1, 2022, the United States will replace the existing Section 232 25% tariff on UK steel products with a tariff-rate quota (TRQ). For steel, historically-based volumes of UK steel products will enter the U.S. market without the application of Section 232 tariffs as follows:
- The aggregate annual import volume under the TRQ is set at 0.5 million metric tons (MMT) for 54 product categories and allocated in line with the 2018-2019 historical period. Steel products from the UK subject to the Section 232 tariff that are within the quota will enter free of any Section 232 tariff, while all steel products subject to the Section 232 tariff entering above the quota will continue to be subject to the 25% tariff.
- Imports of derivative articles of steel will not be subject to the Section 232 tariff.
- To be eligible for Section 232 duty-free treatment under the quota, steel imports must be “melted and poured” in the UK according to current U.S. requirements.
- The United States will maintain its steel product exclusion process.
For aluminum, historically-based volumes of UK aluminum products will enter the U.S. market without the application of Section 232 tariffs as follows:
- The aggregate annual import volume under the TRQ is set at 0.9 thousand metric tons (TMT) for unwrought aluminum under two product categories and at 11.4 TMT for semi-finished (wrought) aluminum under 12 product categories. The import volumes will be allocated in line with the 2018-19 historical period, with the exception of foil (7607), where 2021 annualized data will be utilized. Aluminum products subject to the Section 232 tariff from the UK that are within the quota will enter free of any Section 232 tariff, while all aluminum products subject to the Section 232 tariff entering above the quota will continue to be subject to the 10% tariff.
- Imports of derivative articles of aluminum will not be subject to a Section 232 tariff.
- An importer must provide a certificate of analysis for each aluminum product entered into the United States, as required by current U.S. law.
- The United States will maintain its aluminum product exclusion process.
Further details on the application of these TRQs and the 54 steel product categories and 14 aluminum product categories are available here.
The agreement also requires that any UK steel company owned by a Chinese entity must undertake an audit of its financial records to assess influence from the Chinese government. The results of such audits must be shared with the United States.
In addition, on March 21-22, U.S. Trade Representative Katherine Tai and UK Secretary of State for International Trade Anne-Marie Trevelyan hosted the first joint U.S./UK “Dialogues on the Future of Atlantic Trade.” This meeting discussed advancing mutual international trade priorities. During these discussions, the following commitments were reached:
- Reestablishing the UK-US SME dialogue to continue to bring together SMEs from both sides of the Atlantic to identify ways to further support trade and investment;
- Harnessing the benefits of an open and competitive digital economy, with appropriate safeguards for workers, consumers and businesses;
- Building on the G7’s first ever set of Digital Trade Principles during the UK presidency, such as working toward the digitization of paper-based customs and other border agency requirements to cut red tape;
- Building strong, durable supply chains that can withstand future global shocks;
- Supporting the protection of labor rights and the environment, with one another and our other trading partners;
- Tackling forced labor globally;
- Creating incentives through trade to transition to a decarbonized economy and protecting our environment;
- Advancing trade policy to consider gender, underserved and marginalized communities as workers, consumers, entrepreneurs, and producers; and
- Addressing third party market-distorting practices.
For additional details, see the full Joint Statement on the U.S./UK Dialogues on the Future of Atlantic Trade.