U.S. will extend EU metals tariff exemption if needed -envoy

BRUSSELS (Reuters) - The United States will roll over its suspension of tariffs on European Union steel and aluminium if the two sides need more time to agree on measures to address overcapacity and low-carbon production, the U.S. ambassador to the EU said on Wednesday.

The United States suspended import tariffs of 25% on EU steel and 10% on EU aluminium for two years from January 2022, replacing the tariffs imposed by former President Donald Trump with a tariff rate quote (TRQ) system.

The TRQ allows up to 3.3 million metric tons of EU steel and 384,000 tons of aluminium into the United States tariff-free, reflecting past trade levels, with the tariffs applying for any further amounts.

"We have never threatened to let TRQs expire and reinstate the 25% tariff on EU steel," ambassador Mark Gitenstein told a group of reporters.

"From the beginning, we have made clear to the EU that we intend to roll over our TRQs at the beginning of the year if we needed more time to negotiate," he added.

The United States and the European Union had sought to agree measures to address excess metal production capacity in non-market economies, such as China, and to promote greener steel.

They also wanted a deal on critical minerals in time for a joint summit last week. However, they failed on both fronts.

Gitenstein said the U.S. and the EU had made substantial progress in talks on steel and aluminium in the past two years and were committed to finding a solution in the coming months.

The transatlantic partners were also seeking an agreement under which electric vehicles using cobalt, graphite, lithium, manganese or nickel extracted or processed in the EU would qualify for U.S. tax breaks.

Gitenstein said the U.S. was committed to continuing these discussions too.

(Reporting by Philip Blenkinsop; Editing by Alexander Smith)