The European Commission tried on Thursday not to overreact to the US apparent push to deviate from the Turnberry deal on steel and aluminium trade. However, the armistice that halted the trans-Atlantic metals war now looks fragile.
In July 2023 the European Commission and the Office of the United States Trade Representative (USTR) stitched together the so-called Turnberry deal. Higher duties on steel and aluminium vanished, replaced by a tariff-rate quota and a 15 per cent ceiling on any other reciprocal levies. The pact spared Brussels a €26bn counter-strike and gave both sides breathing space until the end of March, when the European Parliament must finish the enabling law.
Yet on 11 March US Trade Representative Jamieson Greer opened a new front. He launched Section 301 investigations into “structural excess capacity” across 16 economies, the European Union included. The probes cover steel, aluminium, autos, batteries and assorted high-tech wares. They could—after hearings and evidence-gathering—trigger fresh American tariffs. The move landed in Brussels like a rivet in an engine.
Clarifying positions
USTR insists that existing accords remain intact unless partners “renege”. But officials in the Berlaymont wonder whether Washington wants extra leverage before the Turnberry quotas bed in. Section 301 allows penalties if “unreasonable” practices hurt American firms, yet it runs slower than the national-security tool used by Donald Trump in 2018. The immediate risk lies not in imminent duties but in uncertainty that may rattle investors and lawmakers.
Commission spokesman Olof Gill tried to calm nerves at the daily press briefing on 12 March. “Here’s what I can say. The European Commission has been notified by the United States Trade Representative of the decision to initiate Section 301 investigations concerning structural excess capacity in manufacturing sectors, sectors, including an investigation into the policies and practices of the EU and its member states,” he said. Mr Gill welcomed the formal notice but rejected the premise: “The sources of such overcapacity are well identified, and they do not lie in Europe.”
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He reminded reporters that Brussels agrees with Washington on the general problem. “The European Union shares the United States’ concern regarding structural overcapacity in the global economy,” he noted, before adding a pointed distinction: “The EU is a market-driven economy with open markets and transparent policies.”
Words alone will not shield mills. The Commission wants legal clarity that the 301 exercise will not collide with the metals truce or spill over into farm goods. Asked whether the probe could become a pathway for agricultural tariffs, Mr Gill demurred: “Thank you for your follow-up, Tom. Your question should be directed to the US administration.”
Counting quotas
Turnberry’s architecture is technical but crucial. Quota volumes escape the reinstated 25 per cent national-security tariff that snapped back on March 12th. Steel lives in chapters 72-73 of the American tariff schedule, aluminium in chapter 76. Downstream products—machinery, chemicals, perhaps even autos—could suffer if new barriers emerge. Parliament therefore races to ratify the deal before Easter. Some MEPs mutter that a vote should wait until USTR clarifies its intentions.
Mr Gill held the nerve. “We believe that, as the European Union, we should continue to implement our own commitments as negotiated through the joint statement, on the clear understanding that the US upholds their commitments,” he said. The Commission sees no sign of backsliding in Washington. “We have not received any indication that the US administration intends to deviate from those commitments,” Mr Gill stressed. Still, he promised vigilance: “The Commission would respond firmly and proportionately to any breach of the joint statement commitments.”
The EU does not consider itself a contributor to structural excess capacity, but rather a partner in addressing global distortions. — Olof Gill, European Commission spokesperson
A separate worry is legal. The Supreme Court last year struck down the ‘reciprocal tariff’ authority that underpinned Turnberry’s 15 per cent cap. Congress has yet to fix the statute. Section 301 could become a surrogate, letting the White House slap duties if talks sour. USTR opened the public docket on March 17th; comments close on April 15th. Industry groups on both sides of the Atlantic will queue to argue their case.
Keeping the ceiling
Brussels frames the matter as global housekeeping, not bilateral score-settling. “As such, the EU does not consider itself a contributor to structural excess capacity, but rather a partner in addressing global distortions,” Mr Gill said. He urged joint solutions: “These challenges are best addressed through cooperation among partners, as is clearly reflected in the EU-US joint statement.”
Parliament’s trade committee reads the same script. Rapporteurs say the quotas give European mills certainty while nudging them towards greener production. American buyers enjoy stable supply. Only China—and a clutch of other subsidising giants named in USTR’s list—stands to profit if the accord unravels.
For now Brussels keeps its powder dry. “We expect the United States to do the same,” Mr Gill insisted. But officials prepare fallback measures. If extra American levies materialise, the Commission could dust off the €26bn menu of counter-duties originally drafted in 2021. Those would target politically sensitive stateside exports ranging from bourbon to motorcycles.
Signals and safeguards
Washington may yet stand down. Section 301 provides time for negotiation and allows USTR to accept reforms instead of tariffs. Mr Gill acknowledged the open door: “So we will be seeking further clarity from the US on how the opening of this Section 301 investigation would interact with the agreed joint statement framework.”
We believe that, as the European Union, we should continue to implement our own commitments as negotiated through the joint statement. — Olof Gill
On a separate line of inquiry—forced-labour supply chains—he kept counsel. “If any additional Section 301 investigations are announced by the US, I will be in a position to tell you more about the European Union’s views on those at that moment,” he replied.
The Commission hopes that is unnecessary. Europe’s mills have scant appetite for another cycle of tit-for-tat. Parliament’s vote, pencilled for next week, will test whether lawmakers share that patience. Should they delay, investors may suspect the bargain is wobbling. Should they approve, attention shifts back to Washington, and to whether the 301 probe becomes a weapon or a warning.
