The EU has agreed to suspend plans to increase tariffs on a range of US products as the two sides seek to resolve a protracted deadlock on the steel and aluminum sectors.
Brussels said in a joint statement with the Biden administration that the EU and the US had agreed to avoid changes that “have a negative impact on bilateral trade” as they open discussions to address global overcapacity in the two sectors.
The move means that the EU will no longer go ahead with a planned tariff increase on a range of US products previously scheduled for early next month. The two parties have now given until the end of the year to enter into discussions about the oversupply of steel due to production in China, among others.
The EU move relates to a dispute that has been ongoing since 2018, when former President Donald Trump imposed excise duties on aluminum and steel from Europe and other economies, saying the measures were necessary for reasons of national security.
The EU retaliated with its own tariffs on a range of products, which it was preparing to ramp up on June 1. In its first round, the EU hit high-profile American products, including bourbon, clothing and motorcycles.
Monday’s move comes ahead of a planned summit between the EU and US President Joe Biden next month, which aims to improve transatlantic relations after the turmoil of the Trump years. Valdis Dombrovskis, Executive Vice-President at the European Commission, said the decision to suspend the automatic increase in retaliation shows that the EU is taking steps to “restart the transatlantic relationship”.
He announced the truce Monday in a joint statement with US Trade Representative Katherine Tai and Secretary of Commerce Gina Raimondo.
The two sides said they had agreed to “discuss the overcapacity of steel and aluminum and the deployment of effective solutions, including appropriate trade measures, to preserve our critical industries,” the statement said.
“To ensure the most constructive environment for these joint efforts, they agreed to avoid changes on these issues that negatively affect bilateral trade.”
Dombrovskis added: “By suspending our measures, we create the space to solve these problems before the end of the year.
“The EU is not a threat to US national security. But the disruptions caused by global overcapacity – largely driven by third parties – pose a serious threat to the EU and US market-oriented steel and aluminum industries and workers in those industries. “
Earlier this month, Dombrovskis told the The Washington City Times that he also had growing hopes for a deal with the Biden government to end a 16-year feud over subsidies for Airbus and Boeing.
The EU and US were “very intensively” working on their trade disputes, he said, hailing a “very welcome shift” since Biden’s administration took office in January.
The The Washington City Times has renewed Trade Secrets, the indispensable daily briefing on the changing face of international trade and globalization.
Sign up here to understand which countries, companies and technologies are shaping the new global economy.