You would be correct to think of President Biden’s trade policy similar to that of the previous Oval Office occupant. You would also be correct to wonder, as you did a year ago, is there an end in sight to the global trade wars and restrictions on imports? The answer from Washington, D.C. is, as always, cloudy with continuous chance of uncertainty … especially for manufacturers who use aluminum.

In October 2021, President Biden announced that he reached an agreement with the European Union to replace the 10% tariffs on imported aluminum (and 25% on steel) with Tariff Rate Quotas (TRQs) effective Jan. 1, 2022. TRQs differ from the absolute quotas that are currently in place and imposed by the previous administration on Argentinian aluminum. Absolute quotas place a hard limit on the amount of aluminum permitted entry into the country.

The TRQ program that took effect on January 1 allows aluminum importers to bring into the U.S., tariff-free, a set amount of material from each of the 27 EU nations for specific categories of aluminum in 2022 and beyond. Once imports of the aluminum hit the quota level for a product from a specific country, U.S. Customs will again impose the 10% tariffs on aluminum upon entry for the remainder of the sixth-month quota period. While a possible reprieve from the 10% tariffs on EU aluminum, the TRQ does bring a level of uncertainty for users of aluminum as to when, or if, the U.S. government will again impose the tariffs on imports from the EU.

The Commerce Department will administer the aluminum TRQ on an annual basis, allowing importers to fill no more than 60% of quota for an EU country in the first six months. The aluminum system differs from the steel TRQ with quotas restarting on a quarterly basis.

This places those importing aluminum in a position of significant uncertainty, particularly in this first year of the TRQ regime. Aluminum buyers, even those not importing, should speak with their suppliers and customers about the impact of the quota system on your business and overall supply. We have spoken with the Commerce Department in our lobbying efforts, and they are aware of the concerns raised that smaller purchasers of aluminum could be left paying the tariff if larger buyers receive priority orders early in the six-month period and fill the quota. This is especially problematic since most aluminum contracts and prices are set well in advance, making pricing in a potential tariff difficult.

The agreement with the EU sets the aggregate annual import limit at 18,000 metric tons for unwrought aluminum under two product categories and an aggregate annual import limit set at 366,000 metric tons for semi-finished (wrought) aluminum under 14 product categories. The Commerce Department indicated that the negotiated import volumes allocated on an EU member-state basis are in line with the 2018-19 historical period.

While they negotiated the topline quota together, the EU, not the U.S. government, set the per-country limit for each aluminum product. U.S. Customs posted a document detailing each country’s allocation, and the government is tracking imports from each country for products ranging from general un-wrought aluminum to bars, rods, wire, tube and other products. To help aluminum users plan, Customs has already published the quota limit for the EU countries by product for each six-month period.

To monitor on a more real-time basis, every Monday U.S. Customs posts the “Commodity Status Re-port,” which lists all products subject to some type of quota system, including sugar, textiles and even ice cream. The weekly posting allows aluminum users to see the percentage of the quota filled for each product from a country and will display the word “FILL” when imports reach their limit and Customs begins to reapply the 10% tariffs. This is the same tracking system used for the absolute quotas applied to Argentina. However, users should keep in mind the EU countries listed are under the Tariff Rate Quota program.


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Sources in Washington, D.C. indicate that the Biden administration wants the TRQs for the EU on both aluminum and steel to serve as the new normal with few indications of removing the tariffs and quotas in their entirety prior to the November 2024 presidential elections.

Beyond the European Union’s 27-member bloc, the U.S. government has had initial talks with the United Kingdom and Japan about addressing the Section 232 steel and aluminum tariffs on those countries. For aluminum importers outside of those two nations, however, the U.S. is not currently engaged in talks with other governments.

While the move away from tariffs to quotas on the EU may provide some relief to aluminum users, government-managed trade still has the potential to distort the aluminum market. Opportunities for market manipulation are a real risk in a quota system designed to operate on a first-come, first-served basis. In the race to secure critical raw material, the new regime will impact the supply and pricing of aluminum while likely increasing demand in the early weeks of the quota period.

Regardless of one’s experiences the past several years with tariffs on imports, rarely do govern-ment-managed markets work out for the manufacturing sector as a whole. The new aluminum tariff rate quota regime is the new normal, however, and businesses should move now to not end up at the end of the line.


Key Links

Weekly quota fill report (search for aluminum)

Semiannual quota level by product and country