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US and EU agree to end steel and aluminum tariffs and cooperate to address carbon intensity

On 31 October 2021, United States (US) President Joe Biden and European Commission President Ursula von der Leyen announced that the US and the European Union (EU) have reached an interim arrangement regarding a dispute over imports of EU-origin steel and aluminum into the US.1

The arrangement will eliminate US punitive duties imposed on EU-origin steel and aluminum under Section 232 of the Trade Expansion Act of 1962 and instead, implement a tariff rate quota (TRQ), set to be effective on 1 January 2022.2

Presently, there is a 25% tariff levied on certain US products imported into the EU, such as bourbon and motorcycles. Although there is no deadline set, the EU will work to remove these tariffs. As a result of the agreement, the anticipated doubling of these punitive rates will no longer go into effect on 1 December 2021. The formal announcement and agreement reached comes as part of a carbon-based sectoral arrangement with goals of limiting carbon overproduction and fostering US production.

Source EY

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