Steel and aluminum taxes: the United States and the European Union agree

US Secretary of Commerce Gina Raimondo called him“Historical”. The United States and the European Union (EU) signed an agreement on Saturday, October 30 to lift additional customs duties on European imports of steel and aluminum. The announcement ends a conflict that has plagued trade relations between Washington and Brussels since the imposition of these taxes by the Trump administration in 2018.

According to Mme Raimondi, the deal goes “Maintain certain tariffs but allow limited quantities of European imports of steel and aluminum to enter the United States duty free”.

The retaliatory measures announced by the EU, scheduled to enter into force on 1is December on products like Harley-Davidson motorcycles or Kentucky bourbon, will not be applied, said Administration Minister Biden in a conference call from Rome, where a G20 meeting is being held.

European Commissioner for Trade Valdis Dombrovskis announced for his part in a tweet : “We have agreed with the United States to suspend our steel and aluminum trade dispute and to launch cooperation for a global agreement on sustainable steel and aluminum”.

In graphics: Steel and aluminum, a drop in trade between the United States and Europe

The head of the Italian government, Mario Draghi, host of the G20, welcomed the decision “Which confirms the strengthening of already close transatlantic relations and the gradual overcoming of the protectionism of recent years”. M. Draghi “Hopes that this agreement will be a first step towards a greater opening of trade between the EU and the United States, in order to promote the growth of the two economies”.

In the midst of the trade war, the Trump administration in June 2018 imposed additional tariffs of 25% on steel and 10% on aluminum from several regions of the world, from Turkey to China via the Canada, Mexico and the European Union arguing the need to protect national security. In less than three weeks, the Europeans had responded by taxing motorcycles, jeans (including Levi’s), or tobacco, corn, rice or orange juice from the United States.

“No business can survive this”

At Harley-Davidson, European customs taxes were reduced from 6% to 31% for the brand’s products entering the European market, which increased the retail price of each vehicle by $ 2,200.

“These industries were facing retaliatory tariffs of 50%”, recalled Mme Raimondo by evoking “made in USA” products. “No business can survive this. There are 1.7 million Americans who make a living from the spirits industry and 5,600 workers at Harley-Davidson. All these jobs are guaranteed with this agreement ”.

Last June, when the settlement of the dispute over subsidies to Airbus and Boeing was announced, Washington and Brussels gave themselves until the 1is December to find common ground on steel otherwise the EU would impose a tariff hike.

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The announcement of the truce, made on the first day of the G20 leaders’ summit in Rome, does not specify the volume of steel and aluminum imports that will be duty free.

“We expect this agreement to ease the supply chain and reduce cost increases”, said the US Secretary of Commerce, as economies struggle with bottlenecks in the manufacture and distribution of key industrial products.

Go after China

The American Chamber of Commerce reacted positively: “The deal announced today offers some relief to US manufacturers suffering from soaring steel prices and shortages, but further action is needed.”, she said in a statement.

Under the Trump administration, these industrialists had often denounced the cold that this escalation of customs taxes threw on trade. All the more so, since it is the American importers who must first pay these taxes, intended to discourage imports from the targeted countries.

“When these tariffs were imposed in 2018, the Chamber warned that they would directly harm American manufacturers, provoke widespread retaliation (…) and leave the real problem of Chinese steel and aluminum overcapacity virtually untouched. “, adds the professional organization.

The agreement specifies that all steel imported from Europe to the United States will be fine “Made entirely in Europe”, insisted the US administration.

It is also intended to be the framework for future negotiations for an agreement between the European Union and the United States on how to better take into account the carbon intensity of the manufacture of these products. “This means that the US and the EU both produce steel and aluminum which are cleaner than steel produced in China.”, said Gina Raimondo.

For the manufacturers of the Alliance for American Manufacturing, “This interim arrangement must now lead the EU to join the United States in seriously tackling China’s share of global overcapacity and demanding measurable changes”, indicated its president Scott Paul.

The World with AFP

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Steel and aluminum taxes: the United States and the European Union agree

The Inside News Hyderabad