Truce in trade war with US, EU suspends tariff hike on steel and aluminum imports

European Commission Executive Vice President Valdis Dombrovskis, United States Trade Representative Katherine Tai and U.S. Secretary of Commerce Gina M. Raimondo announced in a joint statement the opening of a period of discussions and negotiations aimed at resolving the problem of global steel overcapacity and ending bilateral economic disputes. In this regard, as a sign of goodwill, the European Union has temporarily suspended the tightening of import tariffs on U.S. products scheduled for June 2021.

The story roots back to March 2018, when the Trump administration unilaterally decided to introduce import duties on steel (25%) and aluminum (10%) products: the measure affected most countries, including Europe. The response was not long in coming. At the time, the European Commission decided to put in place a series of retaliatory measures in stages. A first set of provisions, targeting a list of products (including steel and aluminum) worth €2.8 billion, went into effect three years ago; a second crackdown - expected to target a further €3.6 billion worth of trade - was to take effect next month.

Returning to the present, although expectations are still cautious, this is certainly a good starting point for bolstering the transatlantic alliance and putting an end to these economic skirmishes that seem to lose sight of the real issues facing the industry. As reported in the communiqué: “As the United States and EU Member States are allies and partners, sharing similar national security interests as democratic, market economies, they can partner to promote high standards, address shared concerns, and hold countries like China that support trade-distorting policies to account.”