The US government has implemented duty-free quota for 1.25 million tonnes (mnt) of Japanese steel products from 1 Apr’22 under Article 232 of the Trade Expansion Act. The government also announced the breakdown of steel products subject to tax-free quota from Apr’22 to Mar’23. The duty-free quotas have been allocated to 54 commodities, and import volumes will be managed on a quarterly basis.
The tax-free quota for major steel products includes about 200,000 tonnes (t) of hot-rolled steel sheets, about 24,000 t of cold-rolled steel sheets, about 70,000 t of surface-treated steel sheets, and 104,000 t of railroad treaties, each having a quarterly tax-free quota.
The product-specific exemptions that have been in place since the invocation of Article 232 will also be continued. Importers and steel users who wish to avoid the additional tariff of 25% will have to choose between the duty-free quotas and the exemptions established this time.
The tax-free limit of 1.25 mnt per year was set based on the import record from 2018 to 2019. According to the agreement between the Japanese and US governments, the tax-free quota for Apr’23 and thereafter will be increased by 3% if the apparent consumption of steel materials in the United States increases by 6% or more in 2021 over 2020.
As per United States customs data, steel imports into the country before the enforcement of Section 232 were 1.73 mnt in 2017, 1.38 mnt in 2018, 1.13 mnt in 2019 and 720,000 t in 2020.
Imports into the US are expected to recover to a certain level in CY’22 owing to the establishment of duty-free quotas and the continuation of exemptions.
Note: This insight has been published in accordance with an article exchange agreement between SteelMint and Japan Metal Daily.
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