The US and EU have agreed to end a long-running dispute over steel and aluminum tariffs initiated by former President Donald Trump in 2018. Each transatlantic relationship between Washington and Brussels could now be more stable.
The two allies put down their animosity
On October 30, US government officials confirmed that the administration of President Joe Biden and the European Union (EU) officially ended the steel and aluminum tariff war started by former President Donald Trump in 2018.
Sharing with reporters, US Commerce Secretary Gina Raimondo said the new agreement would keep the 25% tariffs imposed by Washington on EU steel and 10% on aluminum, under Section 232 of the Expansion Act. Trade in 1962.
At the same time, the US agreed to exempt a “limited quantity” of industrial metals from the EU. According to Reuters, US officials did not specify the amount of EU steel that is exempt from tariffs entering the US. More than 3.3 million tons of metal will be taxed each year, another source familiar with the matter said.
A steel factory in France. (Photo: Getty Images).
Valdis Dombrovskis, the head of the EU’s trade body, confirmed the deal on Twitter. Accordingly, he said the two sides have agreed to pause the trade dispute and discuss a future global agreement to protect the metallurgical industry of both.
The EU official added that the agreement will be announced by President Biden and European Commission (EC) President Ursula von der Leyen today (October 31).
The new agreement requires EU steel and aluminum to be produced entirely within the common economic bloc in order to qualify for duty free. This provision is supposed to prevent metal supplies from China and non-EU countries from exporting to the US, because most of them are actually processed only in Europe.
Before former President Donald Trump imposed tariffs on EU steel and aluminum for national security reasons, Europe exported about 5 million tons of steel to the US market each year.
In addition, the agreement also eliminates retaliatory tariffs imposed by the EU on US products such as bourbon, Harley-Davidson motorcycles and motor boats. These are items that are expected to be doubled on December 1.
According to Reuters, the new agreement will help remove friction between the two close allies and allow them to focus on negotiating another trade agreement to deal with excess steel and aluminum capacity globally, mainly. is concentrated in China, as well as reducing greenhouse gas emissions.
U.S. steelmaking relies heavily on electric arc furnaces, which in turn produce much lower carbon emissions than the coal-fueled blast furnaces common in China.
Since taking office, Mr. Biden has tried to mend relations with European allies to counter Beijing’s alleged unfair economic practices, including China’s massively producing steel and selling it off to the global market.
Reviving America’s metallurgical industry
Minister Raimondo added that the new agreement of Washington and Brussels will help reduce costs for producers that consume large amounts of steel in the US. Over the past year, steel prices have more than tripled to a record $1,900 per tonne as the industry races to meet the post-COVID-19 surge in demand.
Meanwhile, CEO Mark Dufy of America’s Leading Aluminum Producers Association said that major US aluminum producers will be able to take advantage of investment to increase domestic capacity, because of EU aluminum import quota of EU. The US is placed at a very low level, much lower than it was before Mr. Trump started the tariff war with the EU.
Not to mention, the new agreement also helps “prevent a large amount of foreign steel from entering the US market, which risks weakening the domestic steel industry and affecting the US job market”, said Kevin Dempsey. – President of the American Iron and Steel Institute, said.
“We call on the US and EU to come up with other positive policies to hold China and other countries using distorted trade policies accountable,” Dempsey said.
Due to the withdrawal from the EU, British steel products are still subject to tariffs when entering the US, similar to some other allies of Washington such as Japan. The American Chamber of Commerce, which opposed the imposition of the metal tariffs in the first place, recommended that Washington scrap existing tariffs and quotas on close allies.
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