The U.S. and U.K. reached a deal to ease tariffs on British steel and aluminium, resolving a longstanding irritant as the nations work to strengthen trade and integration.
The deal will allow 500,000 metric tons of steel annually to be imported duty free, with higher amounts subject to tariffs, starting June 1, the Commerce Department said in a statement. The U.K. also will end retaliatory tariffs on more than $500 million worth of U.S. exports, including distilled spirits, agriculture products and consumer goods.
The deal will require that steel qualifying for duty-free treatment be melted and poured in the U.K., although some processing in the European Union is allowed. It also mandates that any British steel company owned by a Chinese entity must undergo an audit of financial records to assess influence from China’s government and share the results with the U.S.
The deal came after a meeting between U.K. International Trade Secretary Anne-Marie Trevelyan and Commerce Secretary Gina Raimondo on Tuesday in Washington. Raimondo said that the deal will help to counter unfair trade practises by countries like China and will ease inflationary pressures.
“By allowing for a flow of duty-free steel and aluminium from the U.K., we further ease the gap between supply and demand for these products in the U.S.,” Raimondo said.
The Trump administration imposed a 25% steel tariff, along with a 10% duty on aluminium imports, in March 2018 on a range of nations, using a national-security provision in a 1962 trade law. The European Union and the U.S. in October brokered a deal for Washington to ease those tariffs, but the tariffs remained on the U.K. due to the nation’s exit from the bloc.
The U.S. also reached a similar accord with Japan in February.
Trevelyan had been in Baltimore this week meeting with U.S. Trade Representative Katherine Tai
Tai said in a statement that the nations also have agreed to keep engaging on the threat posed by carbon intensive non-market excess capacity in the steel and aluminium industries — an area where China is seen as the biggest culprit.
Steel imports from the U.K. totalled 246,893 tons, or slightly less than 1% of all steel imported by the U.S., during 2021. This compares to an average of 635,830 tons that came from the country annually in the five years before the Trump administration implemented Section 232 tariffs.
Storey courtesy of Eric Martin and Joe Deaux– Authors at Bloomberg
Image courtesy of Samuel Wölfl via Pexels
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