The US agrees to withdraw European tariffs on steel and aluminum

WASHINGTON – The Biden administration announced on Saturday that it had reached an agreement to cut tariffs on European steel and aluminum, an agreement officials said would reduce the cost of goods such as cars and washing machines, reduce carbon emissions and help move supply chains. again.

The agreement, reached when President Biden and other world leaders meet at the Group of 20 summit in Rome, is intended to ease transatlantic trade tensions that have worsened under former President Donald J. Trump, whose administration initially introduced tariffs. Mr Biden has made it clear that he wants to improve relations with the European Union, but the agreement also seems to have been carefully planned to avoid the alienation of American unions and producers who supported Mr Biden.

It leaves some protection for the American steel and aluminum industry as it transforms the current 25% tariff on European steel and 10% tariff on aluminum into a so-called tariff quota, an arrangement that meets higher levels of imports. higher duties.

The agreement will eliminate the retaliatory tariffs imposed by the European Union on American products, including orange juice, bourbon and motorcycles. It will also prevent additional tariffs on U.S. products, which are due to take effect on December 1st.

“We fully expect this agreement to ease the supply chain and reduce cost increases as we raise 25% tariffs and increase volume,” Trade Minister Gina Raimondo said.

Ms Raimondo told a news briefing that the deal allowed the United States and the European Union to establish a framework to take into account the carbon intensity of steel and aluminum production, which could allow them to produce “cleaner” products than those made in China. .

“The lack of environmental standards in China is part of what lowers their costs, but it is also a major contributor to climate change,” Raimondo said.

Tariffs were imposed on dozens of countries, including those in the European Union, after the Trump administration found that foreign metals posed a threat to national security.

Mr Biden has promised to work more closely with Europe, which he described as a partner in efforts to combat climate change and compete with authoritarian economies such as China. However, it was under pressure from American metal producers and unions not to completely remove trade barriers that helped protect domestic industry from the overcrowding of cheap foreign metals.

Under the new conditions, the European Union will be able to ship 3.3 million metric tons of steel a year to the United States duty-free, while any quantity in excess of that would be subject to a 25 percent tariff, say people familiar with the deal. Products that were exempted from tariffs this year would also be temporarily exempted.

The agreement will also restrict products made in Europe but using steel from China, Russia, South Korea and other countries. To qualify for duty-free treatment, steel products must be entirely manufactured in the European Union.

Jake Sullivan, the president’s national security adviser, said the deal removed “one of the biggest bilateral irritants in U.S.-EU relations.”

The metal unions in the United States praised the deal, which they said would limit European exports to historically low levels. The United States imported 4.8 million metric tons of European steel in 2018, a level that fell to 3.9 million in 2019 and 2.5 million in 2020.

Thomas M. Conway, president of United Steelworkers International, said in a statement that the deal would “ensure that the U.S. domestic industry remains competitive and able to meet our security and infrastructure needs.”

Mark Duffy, executive director of the American Primary Aluminum Association, said the deal would “maintain the effectiveness” of Trump’s tariffs, “while allowing us to support further investment in the U.S. primary aluminum industry and create more U.S. aluminum jobs. ”

He said the deal would support the U.S. aluminum industry by limiting duty-free imports to historically low levels.

Other countries are still subject to U.S. tariffs, including the United Kingdom, Japan and South Korea. The U.S. Chamber of Commerce, which opposed metal tariffs, said the deal did not go far enough.

Myron Brilliant, executive vice president of the U.S. Chamber of Commerce, said the agreement would offer “some relief for U.S. producers suffering from rising steel prices and shortages, but further action is needed.”

“The United States should drop unfounded allegations that imports of metals from the United Kingdom, Japan, Korea and other close allies pose a threat to our national security – and also drop tariffs and quotas,” he said.

Katie Rogers reported from Rome.

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