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US, EU agree to lift punitive tariffs

·3-min read
US Commerce Secretary Gina Raimondo, pictured here in Pittsburgh on September 29, 2021, announced the deal (AFP/Nicholas Kamm)

The United States and the EU agreed Saturday to lift punitive tariffs on imported European steel and aluminum, ending a dispute that strained their trade ties since then-president Donald Trump imposed the levies three years ago.

The deal was announced by US Commerce Secretary Gina Raimondo, who said it "allows limited volumes of EU steel and aluminum to enter the US tariff-free."

Increased EU retaliatory measures on iconic American products like Harley-Davidson motorcycles, Levi's blue jeans and Kentucky bourbon -- due to take effect December 1 -- will not now be applied, Raimondo said from Rome where she was attending the G20 summit.

EU trade commissioner Valdis Dombrovskis said in a tweet: "we have agreed with US to pause our steel & aluminum ... trade dispute and launch cooperation on a Global Arrangement on Sustainable Steel & Aluminum."

Trump in June 2018 imposed tariffs of 25 percent on steel and 10 percent on aluminum from several economies, including the European Union. He said he was acting on national security grounds.

The Europeans hit back quickly, with duties on tobacco, corn, rice and orange juice from the US, besides motorcycles and bourbon.

In June, as they announced a deal to end their dispute on subsidies to Airbus and Boeing, the US and the European Union gave themselves until December 1 to resolve the steel tariff issue.

"These industries were facing retaliatory tariffs of 50 percent," Raimondo said of the likes of Harley Davidson. "No business can survive that. There are 1.7 million Americans supported by the distilled spirits industry. There are 5,600 manufacturing workers at Harley Davidson and all of their jobs are safer today because of this deal."

The accord announced on the first day of the G20 summit in Rome does not specify the volume of European steel and aluminum that will be allowed in the United States duty-free.

"We expect that this agreement will provide some supply chain relief and help drive down some of those cost increases as we lift the 25 percent tariffs and increase volume," Raimondo said in reference to pandemic-related disruptions to manufacturing and distribution of key products.

- 'Cleaner' steel -

The deal specifies that all steel imported from Europe to the US must be manufactured entirely in Europe, Raimondo said.

She also said the accord creates a framework through which the US and EU will take carbon intensity into account in future talks.

"What that means is that the US and the EU both produce steel and aluminum that is 'cleaner' than the steel produced in China," Raimondo said.

"China's lack of environmental standards is part of what drives down their costs, and it's a major contributor to climate change."

Italian Prime Minister Mario Draghi, the host of the G20 summit, said the accord "confirms the strengthening of already close transatlantic relations and the gradual passing of protectionism in recent years."

The US Chamber of Commerce reacted with relief. Even under Trump it had complained about the tariff battle.

"When these tariffs were imposed in 2018, the Chamber warned they ‘would directly harm American manufacturers, provoke widespread retaliation from our trading partners, and leave virtually untouched the true problem of Chinese steel and aluminum overcapacity," the chamber said in a statement.

"All of that came to pass. These tariffs hurt 50 American workers for every one they helped. We should learn from this experience," it added.

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