EU lifts 25% retaliatory duty on U.S. rice

• By Peter Bachmann •

rice exports
U.S. and European Union negotiators have reachedu a deal that lifts the retaliatory tariffs on U.S. products, including milled and broken rice — photo courtesy LSU AgCenter

As world leaders met for the Group of 20 Summit this weekend, U.S. and European Union 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, the Biden administration announced that it 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 United States agreed to provide a duty-free quota for European steel and aluminum. U.S. representatives also agreed to keeping 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.

Will the UK follow?

The announcement came just two days before an internal Nov. 1 deadline that gives a one-month period for the European Commission to formally repeal the tariffs by Dec. 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 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 United Kingdom to announce the new retaliation list is still unknown.

This article originally appeared in USA Rice’s “The Daily” e-newsletter.

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