The U.S. and U.K. reached a Section 232 trade agreement which will lower tariffs on steel and aluminum imports from the UK. The agreement is based on a tariff-rate quota where the rate for steel (25%) and aluminum (10%) will be lowered to 0% until a quota has been reached, at which point the previous rate will set back in. This agreement will be effective June 1st, 2022.
The trade deal comes at a time when the world is experiencing unprecedented supply chain issues and material shortages and this agreement will add 250,000-500,000 metric tons of additional steel available yearly to the US market compared to previous years. The problems contributing to supply chain and material issues are many and the agreement is one more step to “ease the gap between supply and demand for these products in the United States” as well as easing inflationary pressures for consumers, according to Commerce Secretary Raimondo.
Following the onset of Section 232 tariffs on steel and aluminum, the U.S. has been focused on reaching trade agreements with individual countries or trading blocs. Trade deals were made with the EU and Japan within the last year, where the government placed special emphasis on “green” steel production processes during the negotiations with the aim to create partnership between multiple countries in reducing carbon emissions along with the tariffs. With this goal, more trade deals on steel and aluminum can be expected with other countries in the near future.
For more information, contact Deniz Mustafa at deniz.mustafa@agc.org