EU and USA settle trade dispute over special tariffs

Status: October 31, 2021 00:08

The US and the EU have come to an agreement in a dispute over special tariffs on steel and aluminum from the era of ex-President Trump. Certain quantities can therefore be imported back into the USA duty-free.

By Torsten Teichmann, ARD Studio Rome

The USA is removing the special tariffs of 25 percent and ten percent respectively for a fixed quota of steel and aluminum imports from Europe. In return, the Europeans are dropping additional tariffs on US products such as Harley-Davidson motorcycles. The US National Security Advisor, Jake Sullivan, announced the breakthrough on the sidelines of the G20 meeting in Rome. In December these taxes would have risen to 50 percent.

The US government associates the solution with the hope that current supply chain bottlenecks can be overcome more quickly. In addition, the move should help prices for consumer goods rise less sharply or even fall, according to the American side. This is also good for companies in the USA that depend on steel for their production.

There is still no information on how large the quota for imports from Europe will be. Because apart from the exceptions, the higher tariffs on steel and aluminum products from the time of the Trump era remain in force.

How is China reacting?

In addition, the import is to be linked to the CO2 emissions in steel production. Since Europeans and Americans are convinced that production is cleaner, it could mean that Chinese goods are excluded from importing into the USA. They are working together for a global agreement for sustainable steel and aluminum, tweeted EU Commissioner Vladis Dombrovskis.

The agreement helps the states of the transatlantic community and removes existing irritation in the relationship. And it takes the confrontation with China to new heights. In his video message to the G-20 summit, Chinese President Xi warned against the formation of a block: Small artificial circles or even ideological lines would only create hurdles and increase obstacles.

On the second day of the summit in Rome, it remains to be seen whether the representatives of the People’s Republic will also react directly to the agreement between the Europeans and the USA. The topic will be climate protection, also in preparation for the climate conference that begins in Glasgow.

Alleged threat to national security

The elected President Donald Trump had increased punitive tariffs in June 2018, on the grounds that the amount of previous imports endangered the national security of the United States. It was about protecting one’s own industry and American workers, Trump said at the time. This position continues to be very popular and that is why the tariffs basically remain in force.

It is another example of how Europe and America are at least postponing trade disputes because, given the extremely polarized mood in the USA, they cannot be resolved in principle at the moment. Before that, a kind of armistice had already been achieved in the dispute over state subsidies for the aircraft manufacturers Airbus and Boeing.

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EU and USA settle trade dispute over special tariffs

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