More European-made steel will enter the United States while the EU will only tax motorcycles, bourbon whiskey, peanut butter and jeans at 25% instead of 50%.
President Joe Biden’s latest move, announced while he is at the G20 in Rome, relaxes trade tensions created by ex-president Donald Trump in 2018.
What effect will the deal have?
European steel and aliminum producers had suffered from the Washington-imposed tariffs, while tripling the cost of steel in the US over the last year to over $1,900 (€1,643).
Both the White House and European Trade Commissioner Valdis Dombrovskis confirmed Saturday’s deal. Dombrovskis tweeted that the trade pact would be formally announced by Biden and President of the European Commission Ursula von der Leyen on Sunday.
The agreement would make sure “that all steel entering the US via Europe is produced entirely in Europe,” US Commerce Secretary Gina Raimondo added. This would stop Chinese steel being processed in Europe before being sent to the US.
While US officials did not say how much steel would be imported from the EU, sources told Reuters news agency that annual volumes above 3.3 million tons would be subject to tariffs.
European Union chiefs in May temporarily suspended plans to increase taxes on US-made products like bourbon, motorcycles, jeans, peanut butter and bourbon.
The new agreement means that the EU will tax US whiskey and other products at 25% of its import cost instead of the 50% which was originally intended.
How did the trade dispute start?
Trump introduced the special tariffs on EU steel and aluminum in 2018 under Article 232 of the US Constitition, claiming the foreign products were a threat to national security.
The EU retalliated by imposing tariffs on US products which were set to increase before the end of the year, Raimundo explained. This latest agreement averted this rise.
The two sides had established a December deadline to avoid the tax hikes.
More to come on this breaking news
jc/sms, aw (Reuters, AP, dpa)
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