The United States has reached a deal with the European Union (EU) to resolve a three-year dispute over tariffs on steel and aluminum imported from the bloc, U.S. officials said on Saturday.
“We’ve reached an agreement with the EU which maintains the 232 tariffs but allows limited volumes of EU steel and aluminum to enter the U.S. tariff-free,” U.S. Commerce Secretary Gina Raimondo said in a press release Sunday.
“This agreement is significant in that it will reduce costs for American manufacturers and consumers,” Raimondo said, adding the cost of steel for manufacturers in the U.S. downstream industries has more than tripled in the past year.
In return, the EU will drop their retaliatory tariffs on American goods, according to Raimondo. The EU was set to increase tariffs on Dec. 1 to 50 percent on various U.S. products, including Harley-Davidson motorcycles and bourbon from Kentucky.
“I don’t think we can underestimate how crippling a 50 percent tariff is. A business can’t survive with a 50 percent tariff,” Raimondo said.
“We have also agreed to suspend the WTO disputes against each other related to the 232 actions,” U.S. Trade Representative Katherine Tai told reporters.
Meanwhile, “the U.S. and the EU have agreed to negotiate the first-ever carbon-based arrangement on steel and aluminum trade, and create greater incentives for reducing carbon intensity across modes of production of steel and aluminum produced by American and European companies,” Tai said.
Myron Brilliant, the U.S. Chamber of Commerce’s executive vice president, said Saturday in a statement that the deal offers some relief for American manufacturers suffering from soaring steel prices and shortages, “but further action is needed”.
“Section 232 tariffs and quotas remain in place on imports from many other countries,” Brilliant said.
Citing national security concerns, the administration of former President Donald Trump unilaterally imposed a 25-percent tariff on steel imports and 10-percent tariff on aluminum imports in 2018, under Section 232 of the Trade Expansion Act of 1962, drawing strong opposition domestically and abroad.
Failing to reach a deal with the Trump administration, the EU took the case to the WTO and imposed retaliatory tariffs on a range of American products.
(With inputs from agencies)
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