In a statement, the AEM said: "The United States announced on March 22 it will replace the existing 25% tariff on the UK's steel products under Section 232 with a tariff-rate quota (TRQ), effective June 1, 2022. The deal also requires that any UK steel company owned by a Chinese entity must undertake an audit of its financial records to assess influence from the People's Republic of China government.
"Under the TRQ arrangement, UK steel products will enter the US market without the application of Section 232 tariffs as follows:
TRQ Amount
The aggregate annual import volume under the TRQ is set at 0.5 million metric tons (MMT) under 54 product categories and allocated according to the 2018-2019 historical period.
Derivative Products
Imports of derivative articles of steel, as referenced in Proclamation 9980 from the UK, will not be subject to Section 232 duties.
Eligible Products
a. Subject to the exception provided for in paragraph 3.b., to be eligible for duty-free treatment under the quota, steel imports must be "melted and poured" in the UK and have a UK country of origin, according to current US requirements and rules implementing this arrangement. An importer shall provide relevant documentation substantiating compliance with US requirements. Failure to comply could result in remedies and/or penalties provided under US law.
b. Steel imports which are melted and poured in the UK but further processed in the EU, conferring an EU country of origin, and subsequently imported into the United States may be eligible for duty-free treatment under the quota and count against the UK TRQ volume, not to exceed 37.8 thousand metric tons (TMT) annually under 54 quota product categories and allocated in line with the 2021 historical period.
A breakdown of the said 54 product categories will be published before June 1, 2022.
The United States will develop by June 1, 2022, a mechanism to allow entry of imports under this paragraph with an EU country of origin and which are melted and poured in the UK. The UK will work with industry to develop a mechanism by June 1, 2022, to monitor the utilisation and compliance in relation to access to the TRQ under this paragraph. The UK will provide quarterly updates, including notification on reaching the quota volume limit to the in-quota rates
Tariff Rate
Section 232 steel products from the UK that are within quota will enter free of any Section 232 duty, while all Section 232 products entering above quota will continue to be subject to a Section 232 duty of 25%.
Administration
The TRQ will be calculated for each measure year and administered quarterly. The TRQ will be allocated on a first-come, first-served basis for each product category. Any unused TRQ volume from the first quarter of the year, up to 4% of the allocated quota for that quarter, will roll over to the third quarter; any unused TRQ volume from the second quarter of the year, subject to the same limit, will roll over into the fourth quarter; and any unused TRQ volume from the third quarter, subject to the same limit, will roll over into the first quarter of the following year.
The United States will provide updated information on the utilisation of the quarterly quota for each product category on a public website, including information on the transferred unused TRQ volumes from one quarter to another.
For more information about the US – UK agreement on steel and aluminium, contact AEM's Alex Russ at [email protected] or (202) 898-9006.
