President Joe Biden's administration is considering a quota system as it prepares a proposal for the European Union to resolve a dispute over steel and aluminum imported from the bloc.
The office of the U.S. Trade Representative and Commerce Department also look at increased monitoring of the origins of the metals produced in Europe as a potential part of the solution, according to people familiar with the administration's internal discussions, who asked not to be named because they re private. The U.S. hasn t made the proposal yet formally to the EU, said the people.
The so-called tariff quotas allow countries to export specified quantities of a product to other nations at higher duty rates, but subject all imports of the product above a pre-determined threshold to a higher duty, according to the USTR website.
Earlier this year, in conversation with EU counterparts, the U.S. stressed that it sees the underlying problem of global steel overcapacity as a shared one, largely caused by China, and that the U.S. and EU need to work together.
The USTR continues to have productive conversations with the EU to address our shared concerns about capacity in excess and to ensure the long-term viability of our steel and aluminum industries, USTR spokesman Adam Hodge said in an emailed reply to questions.
The Commerce Department didn't respond to a request for comment.
Then-President Donald Trump posted a 25% duty on steel imports and 10% on inbound shipments of aluminum from producers, including the EU using section 232 of the 1962 Trade Expansion Act. The statute allows for levies without a vote by Congress if imports are deemed a national security threat. The former president said the tariffs were needed to protect the domestic industry from going under.
While Biden has defended the duties in place, and Commerce Secretary Gina Raimondo has kept them in place, some American manufacturers have said they have hurt their business.
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The EU and the U.S. in May agreed to avoid escalating their dispute over tariffs, excluding iconic products like bourbon whiskey and Harley-Davidson motorcycles from a doubling of reciprocal duties in May. The move was intended to create space to try to resolve the steel and aluminum dispute by year end as both sides seeks to rebuild their economic alliance.
Then in June the two parties reached a truce over a dispute over illegal aid to Airbus SE and Boeing Co., agreeing to a temporary suspension of tariffs affecting various goods while talks take place to find a final solution to the disagreement