US and EU Extend Steel Tariff Truce, Postponing Trade Threat
The agreement, reached in late December, pushes back the deadline for retaliatory EU tariffs on US goods to March 2025, providing stability for key American exporters.
The United States and the European Union have successfully averted a near-term trade clash, agreeing in the final days of December to extend a crucial truce in a long-running dispute over steel and aluminum tariffs. The move postpones the threat of the EU re-imposing retaliatory duties on billions of dollars of American goods until March 31, 2025.
The European Commission announced on December 19 that it would prolong the suspension of its countermeasures. The White House followed suit, with a presidential proclamation on December 28 officially extending the US system of tariff-rate quotas (TRQs) for steel and aluminum imports from the EU for the same period.
The agreement provides critical breathing room for ongoing negotiations and offers a sigh of relief to U.S. industries that were in the potential line of fire. Had the truce expired, retaliatory EU tariffs would have snapped back into place, targeting politically sensitive American products such as bourbon whiskey, Harley-Davidson motorcycles, and various agricultural goods.
The underlying conflict stems from the 2018 decision by the Trump administration to impose a 25% tariff on steel and a 10% tariff on aluminum imports, citing national security concerns under Section 232. The EU contested the move and prepared its own set of retaliatory duties. A temporary peace was achieved in late 2021 when the U.S. agreed to replace the outright tariffs on EU metals with a more generous TRQ system, allowing a certain volume of imports to enter duty-free. In exchange, the EU paused its retaliatory measures.
This extension keeps that framework in place. According to a statement from the European Commission, the continued suspension prevents EU exporters from facing an estimated €1.5 billion (approximately $1.63 billion) in annual tariffs.
Both sides are using the extended timeline to pursue a more permanent and ambitious solution: the Global Arrangement on Sustainable Steel and Aluminum (GASSA). These complex negotiations aim to address the twin challenges of global overcapacity, largely centered in China, and the carbon intensity of steel and aluminum production.
While the immediate crisis has been defused, the fundamental disagreements remain unresolved. The extension of the truce is not a final solution but a recognition that more time is needed to negotiate the complex details of the proposed global arrangement. For now, transatlantic trade relations have stepped back from a tariff cliff, but investors and businesses will be closely watching the progress of the GASSA talks as the new 2025 deadline approaches.