Europeans suspend tariffs on steel and aluminum for up to six months
The European Union and the United States agreed on Monday to continue negotiations to end their dispute over steel and aluminum tariffs, with the EU suspending retaliatory measures in hopes Washington will return The same goes for US President Joe Biden’s visit to Brussels next month.
Biden is due to hold a summit with EU leaders in June. This will be his first trip to Brussels since taking office in January.
A joint EU-US statement said on Monday that European Commission Executive Vice President Valdis Dombrovskis, US Trade Representative Katherine Tai and US Trade Secretary Gina Raimondo announced the start of negotiations for dealing with excess capacity in steel and aluminum around the world.
He said he recognized in a virtual meeting last week the need for effective solutions that would preserve their critical industries. They agreed to chart a course that would end WTO disputes following the United States’ application of tariffs on imports from the EU under Article 232, the powerful authority over commercial weapons conferred by the United States Trade Expansion Act 1962.
The trade dispute began when former US President Donald Trump decided to impose punitive tariffs in March 2018 on steel and aluminum from the EU and other countries entering the United States. The European Commission has estimated that tariffs of 25% on steel and 10% on aluminum hit 6.4 billion euros (7.8 billion dollars).
In retaliation, the EU quickly imposed tariffs on US imports of steel, aluminum and whiskey and extended them to motorcycles and orange juice worth â¬ 2.8 billion.
He also took the case to the World Trade Organization and pledged additional tariffs of 3.6 billion euros in three years to match US measures if there is no positive outcome to the WTO.
Dombrovskis said on Monday that the EU would temporarily suspend increasing its rebalancing measures. “This gives us space to find common solutions to this dispute and fight global overcapacity,” he said in a tweet.
The United States will still maintain its tariffs despite the EU’s call for a suspension of up to six months.
Bernd Lange, a German Member of the European Parliament who chairs his Committee on International Trade, said it was understandable that the EU did not raise tariffs just before the EU-US summit and called it ” strong gesture from the EU “.
“I expect the United States to come with a tangible commitment at the summit. Otherwise, no reason not to impose countervailing tariffs,” he said in a tweet.
Hosuk Lee-Makiyama, economist and director of the Brussels-based European Center for International Political Economy, said it was not a deal but a prelude to renewed commitments in time for the next summit EU-US using tariffs as a deterrent, adding It’s similar to how the Trump administration forced the EU, Japan, the Republic of Korea and other supposed allies into threatening tariffs of section 232 on cars.
“Brussels is just trying to force the Biden administration to remove tariffs on steel and aluminum,” he told China Daily.
âHowever, whether you are dealing with Beijing, Brussels or Biden, a trade negotiator should be prepared to use both sticks and carrots to persuade a counterpart. The Biden administration is unlikely to clean up the protective measures of Trump without some serious further concessions from Brussels, âhe said.
Ute John, Head of Trade and Sustainability at Daimler AG EU Corporate Representation, called the development “good news”.
âBut: US tariff # 232 on steel and aluminum must be removed,â she said in a tweet.
In a letter to Raimondo in March, the Coalition of American Metal Manufacturers and Users, representing more than 30,000 U.S. manufacturing companies, complained about the continued ineffectiveness of Trump’s Section 232 tariffs on imports of ‘steel and aluminum.