US announces deal with UK to end steel, aluminum tariffs

WASHINGTON — The United States on Tuesday announced an agreement with Britain to end tariffs on steel and aluminum imports imposed by former president Donald Trump.

"By allowing for a flow of duty-free steel and aluminum from the UK, we further ease the gap between supply and demand for these products in the United States," Commerce Secretary Gina Raimondo said in a statement.

"And by removing the UK's retaliatory tariffs, we reopen the British market to beloved American products."

The deal was the latest in a series of efforts by President Joe Biden to settle trade spats with US allies, some of which were long-running and others started under the Trump administration.

British Prime Minister Boris Johnson cheered the announcement of the deal "with our American friends."

"This is fantastic news and a very welcome boost to our steel and aluminum industries," he said on Twitter.

Washington and London in January announced the start of negotiations to end the dispute, which began in 2018 when Trump imposed levies of 25 per cent on steel and 10 per cent on aluminum imports from Britain and other nations to protect US industry.

US companies for years have struggled to compete with the glut of supply coming out of China, but Trump penalized close trade partners citing national security concerns, which worsened relations with major US allies.

In October, the Biden administration reached a deal to end the tariffs on the European Union, and in early February did the same with Japan.

Under the deal announced on Tuesday, Britain will lift retaliatory tariffs it imposed on $500 million in American imports, including alcohol and consumer goods, the statement said.

It also stipulates that any British steel company "owned by a Chinese entity must undertake an audit of their financial records to assess influence from the People's Republic of China government," the results of which will be shared with the United States, the Commerce Department said.

Britain's International Trade Secretary Anne-Marie Trevelyan, who met with Raimondo in Washington to finalize the agreement, said the deal was "good news for our steel and aluminum industries who have been unfairly hit by these tariffs, and the 80,000 people employed across the sector."

US industry was more cautious in its praise, noting the benefits the tariffs provided to aluminum and steel manufacturers.

"The Russian invasion of Ukraine should remind us all just how critical the domestic steel industry is to our national and economic security," said Scott Paul, president of the Alliance for American Manufacturing. 

"Section 232 quotas and tariffs have permitted the American steel industry to recover, invest, hire, and contribute robustly to our national defence," he said, calling for a pause in more such deals to allow the industry to adjust.

The announcement followed two days of talks between US Trade Representative Katherine Tai and Trevelyan in the port city of Baltimore on the broader trade relationship.

In a statement, Tai said the deal to remove the metal tariffs "delivers on President Biden's vision to repair relationships with our allies while also helping to ensure the long-term viability of our steel and aluminum industries."

Free trade deal? 

Trevalyan and Tai said they would continue their talks next month in Scotland.

"Hopefully we can now move forward and focus on deepening our thriving trading relationship with the US," the British official said.

However, there was no indication of progress towards a free trade agreement between the two countries — a priority of Britain following its departure from the European Union.

Marjorie Chorlins, senior vice president for European Affairs at the US Chamber of Commerce, who took part in discussions in Baltimore on Monday, said a trade pact is not likely "at least not anytime soon."

Trump officials seemed ready to make a new bilateral arrangement with London and had even opened negotiations, but the Biden administration has shown little indication of wanting to continue them.