- The administration of former US President Donald Trump imposed tariffs on the European Union, as well as Canada and Mexico, in 2018. This has been criticized as a manifestation of protectionism.
- On Saturday, US Commerce Secretary Gina Raimondo made it clear that the deal would keep US “Section 232” tariffs at 25 percent. on steel and 10 percent. on aluminium. At the same time, it will enable “limited quantities” of minerals produced in the European Union to be exported to America duty-free
- This is expected to reduce costs for US steel producers. They have more than tripled in the past year, reaching a record high of US$1,900 per ton
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“This removes tension in the transatlantic relationship and prevents a sharp increase in retaliatory tariffs imposed by the European Union,” Reuters noted, quoting US officials.
The agency noted that the settlement eliminates one of the largest areas of conflict between the allies. It allows you to focus on negotiating new trade deals to address the global surplus of steel and aluminum as a primary consequence of China’s production capacity. It will also reduce carbon dioxide emissions in the industry.
According to Reuters, the Americans did not specify the amount of duty-free steel that will be allowed into their country under the agreement with the European Union. However, it cites sources familiar with the contract, who spoke on condition of anonymity, claiming that more than 3.3 million tons annually will be subject to customs duties.
The agreement requires that to qualify for customs-exempt status, the production of steel and aluminum from the European Union must be entirely on its territory. This is to prevent the minerals from being exported to the United States, with minimal processing in Europe, from China and countries outside the European Union.
White House National Security Adviser Jake Sullivan points to the settlement’s relationship to China’s metal overproduction and carbon dioxide emissions in the steel and aluminum sectors.
– This indicates that we can solve the climate crisis and at the same time better protect our employees, and that we do not have to choose between climate and the economy – Sullivan noted.
According to Reuters, after Trump’s presidency, Joe Biden is trying to repair relations with European allies. It also wants to deal more broadly with China’s state-led economic practices, where there has been a massive surplus of steel production capacity that has flooded global markets.
“The agreement also eliminated retaliatory European tariffs on American products, including whiskey and Harley-Davidson motorcycles, which were expected to double on December 1,” Reuters said, citing US officials.
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