The US and UK have reached an agreement on steel and aluminium trade to replace Section 232 measures. US imports of UK-origin steel will from 1 June be subject to the in-quota rate under the applicable tariff rate quota (TRQ) for UK steel, allowing for 500,000 tonnes/year of tariff-free imports. The steel must be “melted and poured” in the UK.

The UK has agreed to provide to the US an attestation in the case of any producer owned or controlled by a company registered in China or a Chinese entity that exports steel to the US under the TRQs. The attestation will be based on an annual strategic audit conducted by an independent third party, to ensure there is no market distorting practices by that producer in the UK that would materially contribute to non-market excess capacity of steel.

Although not specifically mentioned, this point is thought to refer mainly to British Steel, which was acquired by China’s Jingye Group in March 2020, Kallanish notes.

The audit will include an assessment of the steel producer’s and its – if any – UK parent company’s financial records, including any subsidy provided by any government controlled or directed entity in China.

The attestation must be provided by 1 December each year, failing which the US reserves the right to temporarily deny access for the UK steel producer to the in-quota rate for the applicable TRQ.

The US-UK agreement also includes customs cooperation, trade remedy cooperation, shared monitoring of trade, and cooperation on non-market excess capacity and carbon intensity. Both countries will continue measures such as antidumping, countervailing duty, and safeguard measures, and consult each other regarding import surges.

In return, the UK will suspend the additional tariffs imposed on US goods in response to the Section 232 action.

UK Steel director general Gareth Stace says the deal “removes long-standing export barriers and opens up access to this important market once more”. He adds: “Without this agreement UK producers would have remained at a significant competitive disadvantage in US markets to competitors in the EU and Japan, with their exports severely curtailed. From June, UK steel producers will benefit from tariff-free access to customers across the US – from the Atlantic to the Pacific.”