Raymond said the agreement preserved the US tariffs on steel and aluminum that Trump had imposed under Section 232 of the 1962 Trade Expansion Act. At the same time, it would allow a limited number of EU products to enter the US and help the two economies confront a common problem of global overcapacity of supplies. Mainly from China.
US officials have not specified how much steel can be imported into the United States from the European Union duty-free.
Reuters, citing its sources, said the agreement would allow EU countries to export 3.3 million tons of duty-free steel to the United States each year under the tariff quota system.
Larger import volumes will be subject to tariffs, but some steel products that received waivers from US tariffs last year can be imported duty-free in excess of quotas. Including exemptions, imports of 4.3 million tons of steel will be exempted from duties next year. Before the tariffs were introduced, the European Union exported about five million tons of steel to the United States each year.
The agreement requires that steel and aluminum be produced exclusively in the European Union in order to be eligible for duty-free status. The aim of the provision known as the “smelting and casting” standard is to prevent the export of minerals from China and non-EU countries that are minimally processed in the European Union to the United States.
Technically, the agreement leaves applicable US tariffs on steel at 25 percent and on aluminum at 10 percent for national security reasons. However, in practice it exempts a large part of European imports from customs duties.
Trump imposed tariffs on steel and aluminum imports from the European Union and a number of other countries. He justified the widely criticized measure by saying that importing these products threatens the US economy and, consequently, national security. The European Union responded with retaliatory tariffs on select US goods, such as Harley-Davidson motorcycles and Levi Strauss jeans.
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