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The United States and the United Kingdom have initiated bilateral talks to hash out the future of Section 232 tariffs on steel and aluminium imports into the US, and retaliatory UK tariffs on certain US exports.
US Commerce Secretary Gina Raimondo, US Trade Representative Katherine Tai and UK Secretary of State for International Trade Anne-Marie Trevelyan announced on Wednesday January 19 the “start of bilateral discussions to address global steel and aluminium excess capacity, including the United States’ application of tariffs on imports from the United Kingdom under Section 232 and the UK’s retaliatory tariffs on certain US exports to the UK.”
During a virtual meeting on Wednesday, Raimondo and Trevelyan “discussed the impact on their industries stemming from global excess capacity driven largely by China,” according to a US Commerce department press release.
Secretary Raimondo, Ambassador Tai and Secretary Trevelyan “will enter into discussions on the mutual resolution of concerns in this area that addresses steel and aluminium excess capacity and the deployment of effective solutions, including appropriate trade measures, to preserve our critical industries.”
Since March 23, 2018, a 25% tariff on steel and 10% tariff on foreign aluminium has been in place in the US under the national security provision of Section 232.
The implementation of Section 232 had cut UK steel exports to the US by almost 50%, lobby group UK Steel previously said.
In October last year, the US and the European Union reached an agreement to replace Section 232 steel and aluminium tariffs against the bloc’s 27 countries with a tariff-rate quota system, which will run through December 2023.
In total, 3.3 million metric tonnes of European steel will be permitted to enter the US free of tariffs.
UK steelmakers were not included in the deal between the US and the EU.
Following the implementation of the Section 232 tariffs in 2018, Fastmarkets’ daily steel hot-rolled coil index, fob mill US surged to $45.84 per hundredweight ($916.80 per short ton) in early July of that year – a nearly 10-year high at the time.
The index soared to an all-time high of $98.25 per hundredweight ($1,965 per short ton) twice in September last year.
Fastmarkets’ daily steel hot-rolled coil index, fob mill US was calculated at $71.90 per hundredweight ($1,438.00 per short ton) on Wednesday January 19.
The aluminium premium too experienced significant volatility after the introduction of Section 232 tariffs, ending March 2018 at 18.75-19.25 cents per lb compared with 14.00-14.50 cents per lb at the start of that month.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 31.50-34.50 cents per lb on Wednesday January 18, close to an all-time high of 34.75-36.00 cents per lb reached in October 2021.