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The EU has agreed to abandon plans to raise tariffs on a range of US products as both sides seek a long-term solution to the steel and aluminum sectors.
In a joint statement with the Biden administration, Brussels said the EU and the US had agreed to avoid changes that “negatively affect bilateral trade” as they open discussions in the two sectors to address global overcapacity.
This move means that the EU is no longer anticipating an increase in tariffs on a range of US products ahead of schedule as early as next month. The two sides have given themselves until the end of the year to discuss the oversupply of steel as a result of production in countries including China.
The EU’s conduct since 2018 is linked to the conflict that former President Donald Trump imposed on taxes on aluminum and steel in Europe and other economies, saying measures are needed for national security reasons.
The EU adopted its own tariffs on 1 June with tariffs on some products it was preparing to promote. In its first round the EU achieved top US products including bourbon, clothing and motorcycles.
Monday’s move comes ahead of a planned summit between EU and US President Joe Biden next month, aimed at improving transatlantic relations after years of Trump’s riots. European Commission Executive Vice-President Valdis Dombrovskis said the decision to suspend the automatic increase in revenge tariffs showed that the EU was taking steps to “restart transatlantic steps”.
He announced the truce on Monday in a joint appearance with U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo.
Both sides said they agreed to “discuss the overcapacity of steel and aluminum and effective solutions to protect our critical industries, including appropriate trade measures,” the statement said.
“To ensure the most constructive environment for this joint effort, they agreed to avoid changes in those issues that have a negative impact on bilateral trade.”
Dombrovskis added: “By suspending our measures, we are creating a space to solve these problems before the end of the year.
“The EU is not a national security threat to the US. But distortions caused by global overcapacity – largely driven by third parties – pose a serious threat to the market-oriented EU and US steel and aluminum industries and their workers. “
Dombrovskis at the beginning of the month tell The Financial Times was also increasingly hopeful of reaching an agreement with the Biden administration to end a 16-year dispute over subsidies for Airbus and Boeing.
He said the EU and the US were working “very vigorously” to resolve their trade disputes, denouncing the “very welcome turn” since the Biden administration took office in January.
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