EU signals US trade easing by suspending planned tariff increase

The EU has agreed to suspend plans to raise tariffs on a range of US products as the two sides seek a resolution to a long-standing standoff over the steel and aluminum sectors.

Brussels said in a joint statement with the Biden administration that the EU and the US have agreed to avoid changes that “negatively affect bilateral trade” as they open talks to address the issue. global excess capacity in both sectors.

The move means the EU will no longer go ahead with a planned tariff increase on a range of American products that was previously slated for early next month. The two sides have now given themselves until the end of the year to initiate discussions on the excess supply of steel resulting from production in countries including China.

The EU decision is linked to a dispute that has been ongoing since 2018, when former President Donald Trump imposed duties on aluminum and steel from Europe and other economies, claiming the measures were necessary for reasons of national security.

The EU fought back with its own tariffs on a range of products, which it was set to increase on June 1. In its first round, the EU hit top US products including bourbon, clothing, and motorcycles.

Monday’s move precedes a planned summit between the EU and US President Joe Biden next month, which will aim to improve transatlantic relations after the uproar of the Trump years. Valdis Dombrovskis, executive vice-president of the European Commission, said the decision to suspend the automatic increase in retaliatory tariffs showed the EU was taking steps to “restart the transatlantic relationship”.

He announced the truce on Monday in a joint statement with U.S. Trade Representative Katherine Tai and Commerce Secretary Gina Raimondo.

The two sides said they had agreed to discuss “the excess capacity 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 have agreed to avoid changes on these issues which negatively affect bilateral trade.”

Dombrovskis added: “By suspending our measures, we are creating the space to resolve these issues before the end of the year.

“The EU is not a threat to US national security. But the distortions created by global excess capacity – largely attributable to third parties – pose a serious threat to the market-oriented EU and US steel and aluminum industries and workers in those industries. industries.

Earlier this month, Dombrovskis Told The Financial Times, he also increasingly hoped to secure a deal with the Biden administration to end a 16-year feud over subsidies from Airbus and Boeing.

The EU and the US have been engaged “very intensively” in resolving their trade disputes, he said, hailing a “very welcome change” since the Biden administration took office. functions in January.

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