Trade Deal To Lift Tariffs On British Steel, U.S. Whiskey, Motorcycles - Sources

The United States and Britain are expected to announce an end to a long-running steel trade dispute on Tuesday, granting a UK duty-free import quota of over 500,000 tonnes of British-made steel annually, people familiar with the deal said.

The pact, to be announced by U.S. Commerce Secretary Gina Raimondo and Britain's trade minister, Anne-Marie Trevelyan, also will end Britain's retaliatory tariffs on iconic American goods, including Harley-Davidson motorcycles, bourbon whiskey, Levi Strauss blue jeans, and cigarettes, the sources said.

Earlier, Raimondo told reporters in Washington that she was "getting close" to a deal to end the four-year dispute stemming from then-President Donald Trump's 2018 global tariffs of 25% on steel and 10% on aluminum on national security grounds.

Trevelyan told reporters she would meet Raimondo in Washington on Tuesday, and reported good progress in the talks.

Six sources familiar with the matter said the two officials were expected to finalize a deal on removing the tariffs when they meet in Washington on Tuesday afternoon. The United States has reached similar deals with the European Union and Japan.

Two of the sources said that to qualify under the quota the steel must be "melted and poured" in the United Kingdom.

Britain is a relatively small supplier of steel to the United States. Its 500,000-tonne quota for finished steel slightly exceeds average UK shipments to the United States for 2018 and 2019, and is considerably smaller than the EU quota of about 4 million tons and Japan's quota of 1.25 million tons.

The deal also will allow duty-free imports of another 38,000 tonnes of raw steel made in Britain but finished in EU countries, the sources said. Another unique feature is a requirement that British Steel undergo an annual third-party audit to ensure that it is not receiving unfair subsidies or transshipped products via its Chinese owner, Jingye Group.

Trevelyan was due to travel to Washington on Tuesday afternoon after finishing two days of meetings with U.S. Trade Representative Katherine Tai on expanding U.S.-UK trade ties.

Trevelyan, speaking in Baltimore, said: "We've been making good progress. We'll see where we get to."

A spokesperson for the British government said the sides had been working "at pace" and confirmed that Trevelyan and Raimondo would meet Tuesday.

The Trump administration imposed the U.S. metals tariffs in March 2018 under the Section 232 national security law to protect U.S. producers from subsidized imports.

U.S. steelmakers have voiced concerns that easing the tariffs for allies will allow surges of steel into the United States that could hurt industry profitability. But futures prices for Midwest hot-rolled steel remain elevated at $1,138 per ton, compared to $1,265 a year ago, more than $1,900 last August and $825 when tariffs were first imposed in 2018.