fbpx
Qatar v. Ecuador to kick off FIFA World Cup 2022™ on 20 NovemberRead more Webb Fontaine Announces Launch of Niger National Single Window (NNSW) to Bolster TradeRead more Ethiopia: Loan from United Nations Fund Allows Food and Agriculture Organization (FAO) to Scale Up Fertilizers for Farmers in TigrayRead more How Choosing the Right Printer Helps Small Businesses and Content Creators to Save Time, Maximise Productivity and Achieve GrowthRead more Eritrea: World Breastfeeding WeekRead more Eritrean community festival in Scandinavian countriesRead more IOM: Uptick in Migrants Heading Home as World Rebounds from COVID-19Read more Network International & Infobip to offer WhatsApp for Business Banking Services to Financial Institution Clients across AfricaRead more Ambassador Jacobson Visits Gondar in the Amhara Region to Show Continued U.S. Support for the Humanitarian and Development Needs of EthiopiansRead more Voluntary Repatriation of Refugees from Angola to DR Congo ResumesRead more

EU, US move to end steel row and point to China

show caption
The peace offering is the latest chapter in a row that began in June 2018 when former president Donald Trump imposed US tariffs of 25 percent on steel and 10 percent on aluminium from Europe, Asia and elsewhere./AFP
Print Friendly and PDF

May 18, 2021 - 06:51 AM

BRUSSELS, BELGIUM — The EU and US took a step towards a post-Trump trade truce on Monday, agreeing to hold talks to end a tit-for-tat feud over steel and aluminium tariffs.

In a carefully phrased statement, United States Trade Representative Katherine Tai and her EU counterpart Valdis Dombrovskis announced “discussions to address global steel and aluminium excess capacity” that would tackle China’s outsize role in the problem.

The Europeans will, in addition, temporarily suspend a plan to increase tariffs on the US, the EU said.

The peace offering is the latest chapter in a row that began in June 2018 when then US president Donald Trump imposed tariffs of 25 percent on steel and 10 percent on aluminium from Europe, Asia and elsewhere.

Brussels responded with counter-tariffs on 2.8 billion euros worth of iconic US products, including bourbon whiskey, jeans, orange juice and Harley-Davidson motorbikes.

The EU was planning to increase those counter-tariffs on June 1 but, given the easing of tensions with the Biden administration, will now refrain from doing so.

In return, both sides have agreed to talk about the overproduction of steel, which has helped depress prices as output — mainly from China — has flooded the global market and put steel plants in difficulty.

This would be a fresh attempt to pressure Beijing after years of on-and-off international talks to address China’s steel overproduction delivered no result.

‘China to account’ 

While never addressing the Trump tariffs specifically, the statement said both sides “agreed to avoid changes on these issues that negatively affect bilateral trade”.

Singling out China, the statement said that “the United States and EU member states are allies and partners, sharing similar national security interests as democratic, market economies”.

This alignment, it added, means the EU and US “can partner to… hold countries like China that support trade-distorting policies to account.”

The Europeans had hoped that the US would commit further to the truce and had offered to suspend all metals-related tariffs for six months as they pursued a longer term solution.

Still, an EU official said that there was a clear willingness from both sides “to end this dispute” and that there was a “clear path” to do that in the coming weeks.

Another official cautioned however that even if “the tone is more friendly… the policy issues have not changed” with the change in administration.

“It’s not the case that we have now a rosy picture or everything now turns to be to be in bright colours,” the official added.

Despite being a Trump policy, the tariffs have proved politically popular in steel producing states in the US midwest and the Biden administration has for now decided to keep the protections in place.

EU trade ministers meeting on Thursday will discuss the matter in a video call with Tai.

German MEP Bernd Lange, who heads European Parliament’s trade committee, said Europe must remain vigilant on Washington’s reluctance to end the tariffs and pointed to a meeting between President Joe Biden and the EU chiefs next month in Brussels.

Lange said Europe’s “gesture needs to be reciprocated” by Washington at the EU-US summit.

“If not, rebalancing tariffs,” he warned, in reference to the tariff hike that was temporarily suspended for as much as six months by the EU.

In an earlier sign of détente, both sides in March suspended punitive tariffs in the separate, two-decade long dispute over aircraft manufacturers Airbus and Boeing.

Yet another fight — this one over digital taxes slapped on US big tech by France, Spain and other EU nations — has also mellowed, with US tariffs suspended and all sides pursuing a global solution at the OECD.

  • bio
  • twitter
  • facebook
  • latest posts

LMBCBUSINESS.COM uses both Facebook and Disqus comment systems to make it easier for you to contribute. We encourage all readers to share their views on our articles and blog posts. All comments should be relevant to the topic. By posting, you agree to our Privacy Policy. We are committed to maintaining a lively but civil forum for discussion, so we ask you to avoid personal attacks, name-calling, foul language or other inappropriate behavior. Please keep your comments relevant and respectful. By leaving the ‘Post to Facebook’ box selected – when using Facebook comment system – your comment will be published to your Facebook profile in addition to the space below. If you encounter a comment that is abusive, click the “X” in the upper right corner of the Facebook comment box to report spam or abuse. You can also email us.