By Philip Blenkinsop

BRUSSELS (Reuters) -The European Union and the United States have agreed that Washington will continue to suspend tariffs on EU steel and aluminium until March 2025 and Brussels will not reimpose its retaliatory measures, the European Commission said on Tuesday.

Under the 15-month extension, the United States will refrain from its tariffs of 25% on EU steel and 10% on EU aluminium imposed in 2018 by former President Donald Trump, so parking the dispute until after U.S. and EU elections.

EU tariffs, imposed in retaliation, covered a range of U.S. goods from Harley Davidson motorcycles to bourbon whiskey and power boats.

Washington replaced its tariffs with quotas from January 2022, initially for a period of two years.

The two sides were supposed to agree on measures to tackle overcapacity before the end of 2023, but negotiations stalled ahead of a U.S-EU summit in October.

Washington has since offered to extend the tariff suspension to allow more time for talks on creating a system to counter overcapacity and promote less carbon-intensive steel-making.

European steel association Eurofer said it viewed the extension as positive and said it cleared the way for a resumption of negotiations.

The U.S. Distilled Spirits Council said it greatly appreciated the extension and that it had averted a reimposition and doubling of the EU tariff to 50% in the new year. It called for a permanent end to the dispute.

The U.S. quota system 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 further amounts subject to tariffs.

The European Commission has complained the system is rigid and meant EU steel was subject to some $264 million of U.S. tariffs last year, while the EU simply removed its retaliatory tariffs.