Saturday

19th Jun 2021

EU and US reach steel truce in effort to reset relations

  • EU commission vice-president Valdis Dombrovskis said the move was to made in an effort to "reboot the transatlantic relationship” (Photo: European Commission)

The EU and the US have reached a truce in a bruising trade dispute, in an effort to reset relationships ahead of US president Joe Biden's meeting with EU leaders next month.

The two sides have decided to temporarily suspend measures at the heart of a steel tariff spat, top EU and US officials announced on Monday (17 May).

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Former US president Donald Trump slapped tariffs in 2018 on EU steel and aluminium, calling European metals a threat to US national security.

The commission at the time said the US duties - set at 25 percent on steel and 10 percent on aluminium - represented €6.4bn worth of trade.

The EU retaliated by raising tariffs on motorcycles, bourbon, peanut butter and jeans made in the US.

Under the agreement reached over weeks of talks, the EU will not go ahead with increasing its retaliatory tariffs, scheduled for next month.

The EU duties previously imposed were worth €2.8bn, and it was supposed to add €3.6bn in retaliatory charges in June - to offset the effects of the Trump tariffs.

"By suspending our measures, we are creating the space to resolve these issues before the end of the year," said commission vice-president Valdis Dombrovskis.

He added that distortions created by global excess capacity in steel - driven mainly by "third-parties", in a reference to China - pose a serious threat to the market-oriented EU and US steel and aluminium industries and workers,

In a joint US-EU statement, Dombrovskis, US trade representative Katherine Tai and US secretary of commerce Gina M. Raimondo said that they will also discuss steel overcapacity.

The US and the EU "can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account," the statement said.

Biden will meet with EU leaders in mid-June in Brussels to discuss a rekindling of relationship after the bloc's strained relations with Trump.

Dombrovskis described the move as "we are walking the talk in our efforts to reboot the transatlantic relationship".

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