US, EU reach agreement to resolve tariff disputes over steel and aluminum

US officials said on Saturday that the US and the European Union (EU) have come to an agreement to end a three-year dispute over tariffs on steel and aluminium imported from the region. US President Joe Biden and European Commission President Ursula von der Leyen will make the official announcement on Sunday in Rome, Italy, where they are attending a G-20 conference.

US Commerce Secretary Gina Raimondo stated that they have reached an agreement with the EU that retains the 232 tariffs while allowing limited volumes of EU steel and aluminium to enter the US tariff-free. She further said that this agreement lowers the costs for American manufacturers and consumers, noting that steel costs for manufacturers in the US downstream industries had more than tripled in the last year. On December 1, the EU planned to raise taxes on a variety of US imports by 50%, including Harley-Davidson motorcycles and Kentucky bourbon. Raimondo also said that they can overestimate the damage that a 50% tax would cause. A 50% tariff is unsustainable for any business.

The US and the EU have agreed to negotiate the first-ever carbon-based agreement

According to the US Trade Representative Katherine Tai, they have also agreed to put on hold their WTO challenges with each other over the 232 actions. The United States and the European Union have agreed to negotiate the first-ever carbon-based agreement on steel and aluminium trade and create greater incentives for reducing carbon intensity across modes of production of steel and aluminium produced by American and European companies.

The arrangement, according to Myron Brilliant, executive vice president of the US Chamber of Commerce, provides some relief for American producers that are suffering from skyrocketing steel costs and shortages. He further said that on imports from many other nations, Section 232 duties and quotas remain in force.

Trump administration unilaterally implemented a 25% tariff on steel imports

Under Section 232 of the Trade Expansion Act of 1962, the Trump administration unilaterally implemented a 25% tariff on steel imports and a 10% tariff on aluminium imports in 2018, citing national security concerns. After failing to reach an agreement with the Trump administration, the EU took the matter to the World Trade Organization (WTO) and levied retaliatory tariffs on a variety of American products. According to CNBC, bourbon whiskey, peanut butter and orange juice were among the EU's targeted products.

(Inputs from ANI)

Image: AP