US and EU concludes 3 years old dispute over aluminium and steel imports, says Commerce Secretary

On Sunday, Commerce Secretary Gina Raimondo said that the US and the European Union (EU) had achieved an agreement to end a three-year dispute over tariffs on steel and aluminium imports from the region.

"We've reached an agreement with the EU which maintains the 232 tariffs but allows limited volumes of EU steel and aluminium to enter the US tariff-free," as said by Gina Raimondo to the reporters.

"This agreement is significant in that it will reduce costs for American manufacturers and consumers," said Raimondo, highlighting that the cost of steel for manufacturers in the US downstream sectors has more than quadrupled in the last year, according to the Xinhua news agency.

According to Raimondo, the EU will withdraw its retaliatory taxes on American goods in exchange. On December 1, the EU was poised to raise tariffs on a variety of US exports, including Harley-Davidson motorbikes and Kentucky bourbon, to 50 percent.

"I don't think we can underestimate how crippling a 50 percent tariff is. A business can't survive with a 50 per cent tariff," added Raimondo.

"We have also agreed to suspend the WTO disputes against each other related to the 232 actions," said Katherine Tai, the US Trade Representative to the reporters.

Katherine also added that, "The US and the EU have agreed to negotiate the first-ever carbon-based arrangement on steel and aluminium trade, and create greater incentives for reducing carbon intensity across modes of production of steel and aluminium produced by American and European companies.”

The settlement, according to Myron Brilliant, Executive Vice President of the Chamber of Commerce, provides some relief for American industries suffering from skyrocketing steel costs and shortages, “but more action is required."

"Section 232 tariffs and quotas remain in place on imports from many other countries," said Myron Brilliant.

Under Section 232 of the Trade Expansion Act of 1962, the administration of former President Donald Trump unilaterally slapped a 25 percent tariff on steel imports and a 10 percent tariff on aluminium imports in 2018, citing national security concerns. This drew intense domestic and international resistance.

After failing to reach an agreement with Trump's government, the EU took the matter to the World Trade Organization (WTO) and levied retaliatory tariffs on a variety of American goods.