US, EU end Trump-era tariff war on steel and aluminum


WASHINGTON / ROME, October 30 (Reuters) – The United States and the European Union have agreed to end a nagging dispute over U.S. tariffs on steel and aluminum imposed by former President Donald Trump in 2018 , removing an irritant in transatlantic relations and avoiding an EU spike in retaliatory tariffs, US officials said on Saturday.

Commerce Secretary Gina Raimondo told reporters the deal would maintain US “Section 232” tariffs of 25 percent on steel and 10 percent on aluminum, while allowing “limited volumes” of metals produced by the EU to enter duty-free in the United States.

It eliminates a source of friction between the allies and allows them to focus on negotiating a new global trade deal to tackle global overcapacity of steel and aluminum mainly centered in China and reduce carbon emissions from industries. .

EU trade chief Valdis Dombrovskis confirmed the deal, writing on Twitter that “we have agreed with the United States to suspend” the trade dispute and to start cooperation on a future global deal on the durable steel and aluminum. Dombrovskis said the deal would be officially announced on Sunday by Biden and European Commission President Ursula von der Leyen.

US officials have not specified the volume of duty-free steel to be allowed into the United States under a TRQ system agreed with the EU. Sources close to the deal, speaking on condition of anonymity, said annual volumes exceeding 3.3 million tonnes would be subject to tariffs.

The deal grants two more years of duty-free access above the quota for EU steel products that were banned from the Commerce Department last year, US officials said.

The deal requires EU steel and aluminum to be produced entirely in the block – a standard known as “melt and cast” – to qualify for duty-free status. This provision is intended to prevent metals from China and non-EU countries from being minimally treated in Europe before being exported to the United States.

Europe exported about 5 million tonnes of steel a year to the United States before Trump imposed tariffs for national security reasons.

The agreement to negotiate a carbon-based deal on steel and aluminum trade deals with both Chinese overproduction and carbon intensity in the steel and aluminum sector. ‘aluminum,’ White House national security adviser Jake Sullivan told reporters, adding that the climate and workers can be protected. at a time.

Steel production in the United States, which relies heavily on electric arc furnaces, is considered to have much lower carbon emissions than the coal-fired blast furnaces prevalent in China.

Biden sought to mend barriers with European allies after Trump’s presidency to more broadly confront China’s state-led economic practices that led Beijing to build massive excess steel production capacity that inundated the countries. world markets.

The deal will eliminate Europe’s retaliatory tariffs on U.S. products, including bourbon whiskey, Harley-Davidson motorcycles (HOG.N) and powerboats that were due to double on Dec. 1, U.S. officials said.

“The end of this long tariff nightmare is in sight for American distillers, who have fought against the weight of tariffs and the pandemic,” said Distilled Spirits Council chairman Chris Swonger, also urging Britain to lift its tariffs on American whiskeys.


Raimondo said the deal will lower costs for US steel-consuming manufacturers. Steel prices have more than tripled in the past year to record highs of $ 1,900 per tonne as the industry has struggled to cope with increased demand after shutdowns linked to the COVID-19 pandemic, contributing to inflation.

U.S. primary aluminum producers, which were down to two companies when Trump imposed the tariffs, will be able to maintain their investments in boosting domestic capacity as quotas are set at very low levels, well below volumes. pre-tariffs, said Mark Duffy. , CEO of the American Primary Aluminum Association industrial group.

American Iron and Steel Institute President Kevin Dempsey said the quota deal would help “prevent a further surge in steel imports that would undermine our industry and destroy well-paying US jobs.”

“We urge the United States and the EU to take active steps to hold China and other countries that use trade-distorting policies to account,” Dempsey added. “We also believe that cooperation between the US and the EU should focus on new business approaches to tackle climate change, including through the development of effective carbon border adjustment measures.”

Due to its exit from the EU, Britain’s steel exports remain subject to tariffs, as do those of other US allies, including Japan. The US Chamber of Commerce, which has opposed tariffs on metals from the start, said duties and quotas should be removed from “close allies.”

Reporting by David Lawder and Andrea Shalal; Additional reporting by Jan Strupczewski; Editing by Will Dunham and Heather Timmons

Our Standards: The Thomson Reuters Trust Principles.

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