US, EU reach deal to resolve Trump-era steel and aluminum tariff dispute
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ROME – The United States and the European Union have reached an agreement to settle their diplomatic dispute over Trump-era steel and aluminum tariffs, the White House said on Saturday, as the President Joe Biden is in Rome to attend the Group of 20 summit.
The Trump administration imposed taxes on EU steel and aluminum in 2018 on the grounds that foreign products made by US allies posed a threat to US national security. Europeans and other allies were outraged by Trump’s use of Section 232 to justify tariffs, leading many to impose counter-tariffs on motorcycles, bourbon, peanut butter and jeans made in the United States, among others.
National Security Advisor Jake Sullivan, U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo announced the deal on Saturday. They said Section 232 tariffs will not be removed entirely, but a certain amount of European steel and aluminum will be allowed to enter the United States without tariffs as part of the deal.
“We were able to come to an agreement that the EU will drop its retaliatory tariffs (on US products),” Raimondo said. The deal would ensure “that all steel entering the United States via Europe is produced entirely in Europe,” Raimondo added.
Tariff easing is a key step in unraveling one of Trump’s legacies as Biden tried to reset relations between the United States and Europe.
This back and forth has hurt European producers and increased steel costs for American companies. The tariffs also failed to meet Trump’s stated goals of creating jobs at the steel mills. The Bureau of Labor Statistics shows that jobs in primary metal manufacturing increased slightly, reaching 389,100 in 2019. But factories laid off workers during the pandemic, and employment in the sector is about half of that. it was in 1990.
The European Union took steps in May to improve relations. On some retaliatory tariffs, the EU has temporarily suspended planned increases. This meant that American whiskey was subject to a 25% tax in Europe, instead of a planned 50% tax. Both sides faced a deadline in December to avoid the higher tax rate.
The host of the summit, Italian Prime Minister Mario Draghi, on Saturday evening expressed his “great satisfaction” with the tariff agreement. The decision “confirms the ongoing strengthening of already close transatlantic relations and the gradual overcoming of the protectionism of recent years,” he said.
The announcement was also greeted by Chris Swonger, president and CEO of the Distilled Spirits Council of the United States, after what he called “three very difficult years of sagging exports of American whiskey”.
“The lifting of this tariff burden on American whiskeys not only stimulates American distillers and farmers, but also supports the recovery of EU restaurants, bars and distilleries hit hard by the pandemic,” Swonger said.
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