EU Rejects US Proposal for Permanent Tariff Suspension

The European Union (EU) has rebuffed the United States' first proposal to permanently eliminate Section 232 tariffs on European aluminum and steel imports, as reported by The Financial Times. The rejection occurs as both parties aim to establish a Global Arrangement on Sustainable Steel and Aluminum (GASSA) by October 2023, a plan agreed upon in 2021.

The EU contends the US’s proposed solution is likely to breach World Trade Organization rules because it discriminates in favor of domestic producers, instead suggesting its carbon border adjustment mechanism (CBAM) could form the groundwork for a mutually acceptable deal.

However, US trade group The Aluminum Association stresses that the final agreement must not only consider carbon issues but also address non-market behavior within the aluminum market, particularly from China and other countries. It claims that the existing tariff rate quota system and the EU's CBAM regime fall short of effectively managing these concerns, remaining consistent with the original GASSA framework.

E.U. Executive V.P. Valdis Dombrovskis will be in Washington this week, to address this as well as European calls for more favorable treatment of continental EV producers.