EU and US hit the pause button on their steel and aluminum trade dispute

A joint statement dated Oct. 31, 2021, finally puts an end to a long-running trade war started by Donald Trump in June 2018. The European Union and the United States have finally decided to “hit the pause button on the steel and aluminum trade dispute, while hitting the start button on cooperating on a new Global Arrangement on Sustainable Steel and Aluminium.” These are the verbatim words of EU's Executive Vice-President and Commissioner for Trade Valdis Dombrovskis.

It all started when the US administration introduced import tariffs on European steel and aluminum exports - 25% on steel and 10% on aluminum -, justifying it as a national security measure under Section 232 of the Trade Expansion Act of 1962. The EU subsequently rolled out rebalancing measures on US exports, causing a global trade flows diversion.

The European Commission President von der Leyen and United States President Biden agreed to pause the bilateral World Trade Organization disputes on steel and aluminum and to start to deploy combined efforts to achieve the decarbonization of the world steel and aluminum industries and address the global overcapacity.

The former Section 232 tariffs on steel and aluminum will be replaced with a tariff-rate quota regime (TRQ) based on historical volumes.

This reshuffling of the cards is leading to quite a few repercussions in the international arena; to name one: the big Korean steelmakers are very concerned about the negative impact that an increase in Europe’s steel shipments to the U.S. would have on their exports.

More updates soon.   Photo credits: Downing Street, Flickr  
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