November 9, 2021
Details of the U.S.-EU Aluminum and Steel Tariff Rate Quota System
The United States announced it will replace the Section 232 tariffs it had imposed on aluminum and steel imports from the European Union with a new tariff rate quota system (TRQ). In a new insight, Data and Policy Analyst Tom Lee notes that while reaching an agreement is a positive sign, the agreement itself violates executive trade authority, will introduce new costs and uncertainties for U.S. consumers and businesses, and violates World Trade Organization rules.
- The U.S. agreement’s two main stated goals are to reduce carbon emissions from the production of aluminum and steel and to reduce costs for U.S. businesses and consumers.
- By using these tariffs to pursue its climate priorities, the Biden Administration is overstepping the authority vested to the executive branch by Congress to set trade policy.
- Although the U.S. agreement will reduce costs associated with the tariffs, the TQR will encourage market manipulations that lead to higher costs and uncertainty for U.S. companies.