EU and US fail to seal deal on sustainable steel and aluminum

In October 2021, the US and the EU embarked on a two-year journey to negotiate the Global Arrangement on Sustainable Steel and Aluminum (GASSA), aimed at curbing non-market excess capacity and emissions intensity in the steel and aluminum industries and fostering unhampered transatlantic trade.

Former US President Donald Trump introduced a 25% tariff on EU steel and aluminum imports in March 2018, which was put on hold in January 2022. The United States and the European Union had given themselves until the end of October 2023 to find an agreement; there was talk of a common ‘Green Steel Club’ or ‘Carbon Club’ which would standardize the measurement of carbon emissions linked to steel and aluminum production, promote the production of low-emission metals and limit imports of items surpassing a specified carbon content threshold.

However, during the Oct. 20 summit in Washington, US President Joe Biden and European Commission President Ursula von der Leyen could not finalize the accord. According to a joint statement, the US and EU 'have made substantial progress throughout these two years to identify the sources of non-market excess capacity.' They 'have also achieved a better understanding of the tools to address the emissions intensity of the steel and aluminum industries' and 'look forward to continuing to make progress on these important objectives in the next two months.'

The negotiation deadline was extended until year-end. The consequence of not reaching an agreement by then would potentially risk the reinstatement of the Section 232 tariffs and possible retaliatory EU tariffs on US imports. ‘In this situation,’ commented Bernhard Osburg, President of the German Steel Federation, ’the EU cannot afford a trade conflict with the United States.’

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