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Source: Section 232 Tariffs on EU Steel Unlikely to Return in 2024

EU and U.S. negotiators will not be reaching a grand bargain on fighting overcapacity in steelmaking and new trade rules to privilege greener steel in six weeks, predicted a source that gets updates about the negotiations. "I don’t think either side has felt progress is really being made," the source said.

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But, he added, that doesn't mean that the 25% tariffs on EU steel will snap back in 2024. The tariff rate quotas that currently exist on EU steel -- and which only allow steel melted and poured within the EU -- only go through the end of the year. "It seems like at this point, both sides seem to be interested in keeping the peace," said the source, who represents a labor union.

Both governments believe that reinstituting the 25% tariffs on EU imports could rattle the markets at a time when there already is a lot of strain in the global steel market, between the Russian invasion of Ukraine and the slowdown of the Chinese economy. "This isn’t a hard contract deadline. No one really gets hurt if we keep the status quo," he said. "It's better to do it smart than get it wrong."

The union thinks the TRQs need to stay in place in 2024, while negotiations continue. The EU has said ending the TRQs is one of its goals in these negotiations.

American Iron and Steel Institute CEO Kevin Dempsey said in May (see Ref:2305160066]) that unless the EU comes up with an effective system to deal with non-market excess capacity, the TRQs need to remain.

The union source said his union could be open to dropping TRQs if the negotiations lead "to an equivalent level of protection" for EU steelmakers as the U.S. steel industry has.

The joint statement at the time of the initial agreement to replace tariffs with TRQs said both sides pledged to restrict access to their markets for countries that are contributing to non-market excess capacity, including through antidumping or countervailing duties.