The United States and the European Union end the Trump-era customs war over steel and aluminum

WASHINGTON / ROME, October 30 (Reuters) – US and European Union have agreed to end long-running dispute over US steel and aluminum tariffs imposed by former President Donald Trump in 2018, to remove an annoying factor in transatlantic relations and avert an increase in EU retaliation rates, U.S. officials said Saturday.

US Secretary of Commerce Gina Raimondo told reporters that the agreement would maintain US “Section 232” tariffs of 25% on steel and 10% aluminum, while allowing “limited quantities” of EU-produced metals duty-free in the US.

It also completes one of the largest areas of friction between the Allies, allowing them to focus on negotiating new global trade agreements to address global excess steel and aluminum capacity, mainly centered in China, and reduce industry’s carbon emissions.

US officials did not specify the amount of duty-free steel to be allowed into the United States under a tariff quota system agreed with the EU. Sources familiar with the deal speak on condition of anonymity, having told Reuters that annual quantities in excess of 3.3 million tonnes will be subject to tariffs.

The agreement provides an additional two years of duty-free access over the quota for EU steel products, which has won the Ministry of Commerce’s exclusions in the past year, U.S. officials said.

The agreement requires EU steel and aluminum to be produced exclusively in the block – a standard known as “molten and poured” – in order to qualify for duty-free status. The provision aims to prevent metals from China and countries outside the EU from being minimally processed in Europe before exporting to the United States.

“The agreement ultimately to negotiate a carbon-based steel and aluminum trade arrangement addresses both Chinese overproduction and carbon intensity in the steel and aluminum sectors,” White House National Security Advisor Jake Sullivan told reporters. “It shows that we can solve the climate crisis and at the same time protect our workers better – that we do not have to choose between climate or economy.”

President Joe Biden has sought to repair fences with European allies after the Trump presidency to more broadly confront China’s state-run economic practices that led to Beijing building massive excess steel production capacity that has flooded global markets.

Raimondo said the deal will reduce costs for steel-consuming U.S. producers. Steel prices have more than tripled in the past year to records of over $ 1,900 per tonne. tonnes as the industry has struggled to keep pace with rising demand for COVID-19 pandemic-related shutdowns, contributing to inflation.

Europe exported about 5 million tons of steel annually to the United States ahead of Trump’s introduction of “Section 232” tariffs in March 2018 for national security reasons.

The agreement also eliminates Europe’s retaliatory tariffs against U.S. products, including whiskey and Harley-Davidson (HOG.N) motorcycles, which were to double on Dec. 1, U.S. officials said.

The United States allows imports of steel and aluminum duty-free from North American trade agreement partners Mexico and Canada, with a mechanism that allows for the reintroduction of customs duties in the event of an unexpected “increase” in import volumes.

Reporting by David Lawder and Andrea Shalal; Additional reporting by Jan Strupczewski; Editing Will Dunham and Heather Timmons

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