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March 28, 2022

United States Will End Section 232 Metals Tariffs On British Products

On March 23, U.S. Commerce Secretary Gina Raimondo and U.S. Trade Representative Katherine Tai announced the United States will end Section 232 steel and aluminum tariffs on products from the United Kingdom (UK) and replace them with a system of tariff-rate quotas, or TRQs.

The new regime takes effect June 1, 2022. The agreement:

  • Establishes a TRQ that will allow certain volumes of British steel and aluminum to enter the United States duty-free. Once shipments reach more than 500,000 metric tons for steel and 900,000 metric tons for aluminum, they would be subject to current Section 232 penalties, which are 25 percent for steel and 10 percent for aluminum.
    • In order to be eligible for duty-free treatment, steel imports generally must be “melted and poured” in the UK and have a UK country of origin.
    • Aluminum imports are subject to “smelt and cast” provisions where producers must prove products contain no aluminum from China, Russia, or Belarus.
  • Requires attestations in cases where a known UK steel producer is owned or controlled by a company registered in China or a Chinese entity and exports steel to the U.S. government.
  • Requires a UK steel company owned by a Chinese entity to audit their financial records to assess influence from the Chinese government. The results of the audit must be shared with the U.S. government.
  • Requires the United States and UK to confer on non-market excess capacity and on the situation in global steel and aluminum markets, including market trends, domestic industry conditions, and analysis on import and export data. The two governments also will monitor steel and aluminum trade between the two countries and will share publicly available information and best practices on topics including fraud detection, evasion, and circumvention of duties.
  • Requires the UK to terminate the retaliatory tariffs it imposed on approximately $500 million worth of annual imports from the United States, including distilled spirits, various agriculture products, and consumer goods.

Read the full joint statement here. Another detailed explanation of the new regime is here. According to Reuters, the UK is a relatively small supplier of steel to the United States. In fact, the new quota for finished steel exceeds average UK shipments to the United States in 2018 and 2019.

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