G20 Summit: US, EU settles to soften tariffs on aluminium and steel

The United States and the European Union have settled to soften tariffs on the multi-billion dollars of aluminium and steel products in an attempt to undertake a trade discourse that has lingered over transatlantic relations since the era of Donald Trump administration.

Valdis Dombrovskis, EU trade commissioner said: “We have agreed with the US to pause our steel and aluminium [section 232] trade dispute and launch co-operation on a Global Arrangement on Sustainable Steel and Aluminium.”

He added: “Joe Biden, US President and Ursula von der Leyen, EU Commission President, would give more details on 31^st October 2021.”

It has been for months that the Biden administration and the EU were negotiating a settlement on aluminium and steel. In 2018, former US President Donald Trump imposed tariffs on metals products under little-used national security legislation.

The agreement undertakes in place a system of tariff-rate quotas that will grant exports of metals between the EU and the US with lesser levies up to a certain volume.

The EU was ready to hike retaliatory tariffs on US products from 1^st December 2021, however, it ceased the decision in May to empower time for negotiations.

On 30^th October 2021, during the G20 summit in Rome, the deal was publicized and US officials commented: “It would reduce global carbon emissions and Chinese overcapacity in the sector while easing supply chain bottlenecks in the metals industry.”

Katherine Tai, US trade representative further added in regards to the EU eliminating retaliatory tariffs against the US said: “We have agreed to suspend the WTO disputes against each other related to the 232 disputes.”

“Going forward, the US and the EU will analyse the volume of steel and aluminium imports from the EU each year, share information and best practices on trade remedies, and ensure that products from non-market economies do not benefit from the arrangement,” she said.

“The agreement also addresses global overcapacity from China and toughens enforcement mechanism to prevent leakage of Chinese and other unfairly traded steel and aluminium into the US market”.