“Today’s announcement embodies President Biden’s vision to turn the page on past disputes and open a new chapter in enhanced transatlantic relations,” US Trade Representative Katherine Tai said on Saturday.
European Trade Commissioner Valdis Dombrovskis suggested in a tweet Saturday that the deal will not be permanent, calling the latest developments a “pause” in the dispute. Biden and European Commission President Ursula von der Leyen will announce more details on Sunday, he noted.
Trading partners also agreed to develop a long-term plan that confronts China with its excess steel production and puts pressure on carbon-intensive steel exporters. US officials have described it as a one-of-a-kind deal. U.S. officials described the deal as the first of its kind, but did not describe specific commitments, saying these would be negotiated later with input from other major steel-producing economies.
“Today’s deal not only removes one of the biggest bilateral irritants in US-EU relations, but it actually turns it into a joint breakthrough on two central challenges,” the security adviser said. National Jake Sullivan to reporters on the conference call.
But while both sides share these priorities, they have not always agreed on an approach.
The Biden administration has urged Brussels to take a firmer stance towards Beijing on trade and other issues, but some European leaders say they are more inclined to engage with China than against it. And while the EU pursues a border carbon tax on steel and other products, such proposals are more difficult to implement in the United States for political and practical reasons.
Trump angered trading partners around the world when he announced tariffs on steel and aluminum imports in 2018, arguing that cheap foreign imports were unfairly undermining U.S. producers and thus posing a threat to the United States. national security. His administration negotiated alternative trade measures with Canada, Mexico and other allies, but kept EU rights in place.
An industry official told POLITICO that the new deal will include a quota that allows 3.3 million tonnes of steel to be imported from the EU duty-free and that imports above that amount will be subject to the existing tax of 25%.
An additional one million metric tonnes of steel that were previously exempt from existing tariffs will not be subject to duties for at least two years under the new agreement.
The deal also contains a “melt and pour” standard which, as the name suggests, requires duty-free metals to be melted and poured in Europe, another senior administration official said. American steel producers have been pushing for these rules to be included to prevent steel from China and other countries from being touted as an EU product.
“For too long, China has routed its cheap steel to the United States through Europe and other markets, which has lowered prices and made it virtually impossible to compete with the American steel industry. and aluminum. And, of course, in doing so, harming the industry, harming our workers, ”said Commerce Secretary Gina Raimondo.
Raimondo admitted to reporters that the negotiations had been “arduous” and “complicated”. The Biden administration has faced intense pressure from the steel industry and its influential unions to keep tariffs in place or replace them with similar protections. These groups welcomed the agreement reached on Saturday.
“The proper implementation and application of the [limits] will be crucial in ensuring that the new measures are effective in achieving these critical goals, ”said Kevin Dempsey, president and CEO of the American Iron and Steel Institute, in a statement. “We hope that with the conclusion of this agreement, the US and the EU will now work on a common plan of action to challenge non-trade industrial policies and other government interventions that fuel overcapacity in the world. ‘steel.
Tom Conway, president of United Steelworkers International, hailed the agreement to continue supporting U.S. producers by capping duty-free imports and fighting the flow of cheap foreign steel through Europe. “The deal creates certainty both for domestic steel producers and for users unable to find domestic supplies,” Conway said in a statement.
At the same time, American companies that need metals for manufacturing have complained about the skyrocketing cost of steel and the delay in their orders. Raimondo said on Saturday that an increase in duty-free imports from the EU would help alleviate both of these issues.
Various US exports such as orange juice, whiskey and Harley-Davidson motorcycles have also been hit by retaliatory 25% tariffs from the EU, which were expected to double in June before both sides n start negotiations. The sanctions turned a wide range of American industries, including food and manufactured goods, into collateral damage and increased pressure on Biden to strike a deal.
Tai said the EU had agreed to eliminate these retaliatory tariffs as part of the deal, adding that the two sides would also withdraw their trade complaints to the World Trade Organization.
Senate Finance Chairman Ron Wyden (D-Ore.) Said the deal “takes important steps” to resolve the tariff dispute and “begins a new phase of substantial cooperation” on common issues like the climate. “Continuing to strengthen the relationship between the United States and the EU is essential to fight against China’s efforts to take over entire industries and leave American workers in limbo,” he said in a statement.
But some business groups argue the new conditions don’t go far enough. Jake Colvin, chairman of the National Council for Foreign Trade, said the deal was “not an optimal outcome” because it installs “an undesirable form of managed trade that will continue to create uncertainty for workers and businesses. companies on both sides of the Atlantic. “