US Considers Introducing Quotas on EU Steel

Significant Drop Expected from Initial 50% Tariff

Quantity Subject to Lower Tariffs to be Discussed Later

The United States has decided to consider introducing a tariff-rate quota (TRQ) system for certain amounts of European steel and aluminum. As a result, the 50% tariff rate initially imposed by the US on these products is likely to decrease.

On the 21st, the United States and the European Union (EU) announced a joint statement documenting this agreement. In the statement, both sides said they would "ensure mutual, secure supply chains through tariff quotas, etc." and declared, "At the same time, we also plan to consider cooperation to protect our domestic markets from oversupply." The exact quantities and tariff rates for lower tariffs will be discussed at a later date.

Previously, on the 27th of last month, the US signed a trade agreement with the EU that set a 15% tariff on European products. At that time, the EU announced that the US had agreed to apply lower tariffs on certain volumes of European steel and aluminum. However, the US explained, without any further comment, that the 50% tariff would remain, indicating a difference in positions. South Korea also agreed with the US to lower import tariffs to 15%, but steel and other metal items were not included in this round of negotiations.

Meanwhile, a plan was also proposed to reduce the current 27.5% tariff on European cars and auto parts to 15%. If the EU prepares legislation to lower tariffs on US goods, the US will similarly reduce tariffs on European cars and auto parts to around 15%. Maroš Šefčovič, EU Commissioner for Trade, said, "The Commission plans to propose the bill by the end of this month." If the EU adopts the bill this month, tariffs on European cars are expected to be reduced starting the first of next month.

Myung-Hyun Han, wise@hankyung.com