The European Union and the US will extend a truce on steel and aluminum imports, avoiding a possible return of billions of dollars in tariffs on transatlantic commerce.

The European Commission, the EU executive’s arm, announced on Tuesday it will suspend retaliatory measures implemented during the Trump presidency for 15 months, until March 31, 2025. Brussels, however, did not convince Washington to improve its current tariff-rate quotas, or TRQs, above which duties are applied.

The extension will result in EU steel and aluminum exporters saving approximately €1.5 billion ($1.6 billion) in tariffs annually, according to a commission statement. The US has to complete its own procedure to extend its TRQ system for the same period as from January.

The European bloc considers that quota system, which comprises quarterly quotas for 54 steel mill product categories and 16 aluminum mill product categories, too rigid and has been asking for improvements, including annual quotas for the European market.

The commission said in a statement that “the EU will continue to engage constructively with the US to preserve its legal rights and remove US 232 tariffs on EU exports for good,” referring to a section of US law giving the president authority to place duties on certain imports for national security reasons. 

The announcement came as both sides are running out of time to conclude the so-called Global Arrangement on Sustainable Steel and Aluminum, or GSA. The deal is set to leave the tariff exemptions in place until after the upcoming US presidential election in November 2024.

The GSA accord would represent a permanent solution to a Trump-era dispute sparked by tariffs on European imports on the grounds they posed risks to American national security, which triggered retaliatory measures from the bloc. Both trade partners suspended their tit-for-tat with a temporary truce in 2021, which expires at year-end, as they seek to negotiate the GSA agreement.

The EU wants the US to lift all the tariff-rate quotas as part of the broader GSA agreement, which the US refuses, and could consider relaunching a case against the US at the World Trade Organization or reimposing some tariffs on American products. Such a move lacks broad support among EU member states, which are concerned about the potential rising trade tensions ahead of next year’s election.