The announcement, on Saturday October 30, was not a surprise. There had been speculation for months that the sides would come to an agreement by November 1.

It has been more than 3½ years since the Section 232 tariffs - 25% on steel products and 10% on aluminum products - were imposed

The amount of steel that will be allowed to enter duty-free from the EU before Section 232 tariffs are reinstated was not disclosed.

The volume permitted to come in from the EU under a quota system will be less than the tonnage the US imported from the EU in 2017 and 2018, United Steelworkers International president Tom Conway said in a news release. 

The US imported 30.57 million tonnes of steel in 2018, with 5.01 million tonnes coming from EU countries, according to US Census data.

In 2020, the US imported 20.03 million tonnes of steel, with 2.52 million tonnes arriving from the EU, the data showed. 

The agreement states that the steel eligible under the quota must be melted and poured in the EU. Conway said. This means slab imported by the EU from another country and converted to a finished steel product would not be permitted to enter the US under the quota system.

Conway said a parallel agreement was reached regarding aluminium.

Raimondo hinted Saturday in published comments obtained by Fastmarkets that the deal could result in lower steel prices, noting that steel prices have more than tripled in the past year.

“This agreement will reduce costs for American manufacturers and consumers. We know that steel and aluminium are in a range of products from cars and trucks to washing machines, other household appliances and construction materials,” Raimondo said. “Our two governments have also agreed to work together to use trade tools to fight global excess capacity of steel and aluminium and to address carbon intensity, marking a major milestone in our fight against climate change."

With an agreement in place, the US and EU can address other vital issues, said Philip K Bell, president of the Washington-based Steel Manufacturers Association.

“The deal sets the stage for both trading partners to work collaboratively on solving critical issues such as global excess steel capacity, diversion of unfairly traded steel imports from China through the EU and reduction of greenhouse gas emissions,” Bell said. “We also believe that with the additional EU volumes not subject to quota, there is a renewed need for the administration [of US President Joe Biden] to narrow the exclusion process substantially. Many exclusions will not be needed as new investments by the US industry come online,” Bell added.

Conway believes the agreement could help to address bigger issues.

"It will also provide a much-needed opportunity to address the non-market predatory practices of China and other countries that have distorted global markets,” he said. "This new arrangement… will create a framework that will ensure US domestic industries remain competitive and able to meet our security and infrastructure needs."

Kevin Dempsey, president and chief executive officer of the Washington-based American Iron and Steel Institute, said it is critical for the government to enforce the quota system.

“Proper implementation and enforcement of the tariff-rate quota will be crucial to ensuring that the new measures are effective in meeting these critical objectives,” he said. “We urge the US and EU to take active steps to hold China and other countries that employ trade-distorting policies to account. We also believe US-EU cooperation should focus on new trade approaches to address climate change, including through development of effective carbon border adjustment measures."