The United States and European Union are expected this weekend to announce a deal to resolve a dispute over US steel and aluminum tariffs imposed in 2018 by former President Donald Trump, easing a major transatlantic trade irritant, six people familiar with the agreement said.
Three of the sources said the agreement, details of which were still being finalized, would allow EU countries to export duty free some 3.3 million tons of steel annually to the United States under a tariff-rate quota system.
“An agreement on steel has been reached and will be announced soon,” said one source familiar with the matter, speaking on condition of anonymity.
US President Joe Biden has sought to mend fences with European allies following Trump’s presidency to more broadly confront China’s state-driven economic practices that led to Beijing building massive excess steelmaking capacity that has flooded global markets.
Italian Prime Minister Mario Draghi raised the need to resolve trade issues during a meeting with Biden on Friday as a G20 leaders summit got underway in Rome, a source familiar with the meeting said.
The deal may ease record-high US steel prices that have topped $1,900 a ton as the industry has struggled to keep up with a demand surge after COVID-19 pandemic-related shutdowns. This has contributed to rising price inflation for manufactured products in the United States including cars.
Steel volumes above the 3.3 million-ton quota would be subject to tariffs, but additional duty free-status would be extended for about 1 million tons of EU steel products that had previously won Commerce Department tariff exclusions, three sources said.
The agreement leaves intact Trump’s global tariffs of 25 per cent on steel and 10 per cent on aluminum but on a practical basis exempts a substantial portion of Europe’s steel exports to the United States.
Europe exported around 5 million tons of steel annually to the United States prior to Trump’s imposition of the “Section 232” tariffs in March 2018 on national security grounds.
The Commerce Department, US Trade Representative’s office and White House did not immediately respond to requests for comment.
US Trade Representative Katherine Tai is scheduled to address American steel industry executives on Tuesday in Washington. The industry and the United Steelworkers union have been pressing Biden’s administration to maintain the steel tariffs to protect a resurgence in new investment since 2018.
Industry officials also have said they were pushing for a requirement that any EU steel imported duty free be melted and poured in the trade bloc, a provision aimed at keeping Chinese steel from being minimally processed in Europe and exported to the United States.
The metals deal would allow officials about a month to implement it before a late-November deadline for a doubling of EU retaliatory tariffs on certain US products, including motorcycles and whiskey.
Details were not immediately available on terms of the aluminum portion of the deal. An industry source said a resolution is expected to be included as part of an overall metals dispute agreement.
The United States allows imports of steel duty-from North American trade deal partners Mexico and Canada, with a mechanism that allows tariffs to be reimposed in the event of an unexpected “surge” in import volumes.
REUTERS