EU Lifts 25 Percent Retaliatory Duty on U.S. Rice

ROME, ITALY – As world leaders met for the Group of 20 Summit this weekend, U.S. and European Union (EU) negotiators worked on the sidelines to reach a deal that lifts the retaliatory tariffs on U.S. products, including milled and broken rice.

In May of this year, the Biden Administration announced that they intended to enter negotiations with the EU to remove the tariffs placed on U.S. imports in retaliation for the U.S. application of tariffs on European steel and aluminum imports under the authority of Section 232.  Since May, U.S. Trade Representative Katherine Tai and Department of Commerce Secretary Gina Raimondo have been in talks with EU trade negotiators and the European steel and aluminum industries.  Ultimately, the U.S. agreed to provide a duty-free quota for European steel and aluminum and will keep the Section 232 tariffs in place for any steel or aluminum shipped in excess of the quota, maintaining some level of protection for American-made steel and aluminum.

The announcement came just two days before an internal November 1 deadline that gives a one-month period for the European Commission to formally repeal the tariffs by December 1, when some EU retaliatory duties were set to double.

“We are thrilled with this news,” said Mark Holt, Arkansas rice miller and chair of the USA Rice Subcommittees that oversee Europe, Africa, and Middle East trade policy and promotions.  “Since the onset of Brexit and the tense trade relationship over the 232 tariffs started, our milled rice exports to Europe have suffered, but we hope this is a sign that things are turning around.  In short crop years like we’re in, prices tend to be higher and that extra 25 percent tariff really makes it difficult to be competitive.  Let’s hope a similar announcement on the UK soon follows.”

Like the EU, the United Kingdom (UK) also has tariffs in place on U.S. milled and broken rice in response to the U.S. steel and aluminum tariffs.  The UK is in the process of reassessing the U.S. products subject to the retaliation and has proposed removal of rice from that list.  Timing for the UK to announce the new retaliation list is still unknown.