Biden administration, EU reach agreement to ease Trump tariffs on aluminum and steel

By Donald Judd

The Biden administration reached an agreement with the European Union on Saturday to ease Trump-era sanctions on aluminum and steel, officials announced, another step in deescalating tensions with European allies as Biden is in Rome for the G20 summit.

“The President has said that one of the key goals of his presidency is to demonstrate that democracies can deliver results for their people, especially working people, and solve the challenges of the 21st century, and two of the greatest of those challenges is the threat of climate change and the economic threat posed by unfair competition by China,” national security adviser Jake Sullivan told reporters Saturday. “Today’s deal with the EU delivers on that promise by making headway on both fronts.”

In 2018, Trump announced a 25% tariff on steel imports and 10% tariff on aluminum to shore up the struggling industries, drawing stiff rebuke from US manufacturers of products made using steel and aluminum, which maintained that the tariffs would cost jobs in their operations and increase consumer prices. On Saturday’s call, Sullivan called the tariffs “one of the largest bilateral irritants in the US-EU relationship.”

Commerce Secretary Gina Raimondo applauded Saturday’s agreement as well, while acknowledging it wouldn’t fully revoke tariffs on aluminum and steel in place.

“We’ve reached an agreement with the EU which maintains the 232 tariffs but allows limited volumes of EU steel and aluminum to enter the US territory,” Raimondo told reporters. “We’ve also agreed to work together with the EU to use trade tools to fight global excess capacity of steel and aluminum to address carbon intensity, which is a huge milestone in our fight against climate change.”

Saturday’s agreement was the results of “arduous” talks in Rome, Raimondo said, and still aims to block China from flooding markets with excess steel, while easing pressures on imports from Europe.

“For far too long, China was routing its cheap steel into the US via Europe and other markets, which drove down prices and made it essentially impossible for America steel and aluminum industry to compete,” Raimondo said. “And of course, in so doing, hurting the industry, hurting our workers — so today’s agreement enables us to allow limited volumes of steel to enter the US tariff-free while still protecting America’s steel industry by ensuring that all steel entering the US via Europe is produced entirely in Europe.”

A senior administration official dismissed the suggestion that easing the tariffs on aluminum and steel might cost Biden politically. “This deal is just the first deal that actually gets something in exchange for US steel companies and its workers,” the official said Saturday, adding that clean standards for steel will provide an advantage to American manufacturers. “Right now, our steel companies are the cleanest in the world, and they don’t get any credit for that. And this deal will turn that sort of low carbon intensity across all modes of production into a source of competitive advantage.”

Per Raimondo, today’s agreement also means the EU will drop retaliatory tariffs against US brands like Harley-Davidson as well as the Kentucky bourbon industry, set to increase in December.

“There’s 1.7 million Americans supported by the distilled spirits industry, 5,600 manufacturing workers at Harley-Davidson, and all of their jobs are safer today because of this deal,” she boasted. “This deal creates a framework through which the US and EU agree to take carbon intensity into account in future negotiations, it’s the first of its kind deal. And it means that the US and EU, you know, both produce steel and aluminum that is significantly cleaner, i.e. less carbon intensive than the steel produced in China.”

American manufacturers were quick to celebrate the news Saturday, with Harley-Davidson calling the agreement “an important course correction in U.S.-EU trade relations,” and thanked the administration for its efforts.

“Today’s news is a big win for Harley-Davidson and our customers, employees and dealers in Europe, said CEO Jochen Zeitz in a statement. “We are excited that this brings an end to a conflict that was not of our making, and in which Harley-Davidson had no place.”

Whiskey distillers said they were eager to serve their European customers after Saturday’s announcement.

“With the removal of these EU tariffs, we are energized and ready to ramp up our American Whiskey promotions in the EU to re-introduce America’s native spirits to EU consumers and resume a great American export success story,” the Distilled Spirits Council, which represents American whiskey distillers, told CNN in a statement Saturday. “The end of this long tariff nightmare is in sight for U.S. distillers, who have struggled with the weight of the tariffs and the pandemic.”

“Today’s announcement delivers on President Biden’s vision to turn the page on past disputes and begin a new chapter of enhanced transatlantic relations,” US Trade Representative Katherine Tai told reporters. “In addition to the EU, eliminating the retaliatory tariffs against the US,” the two parties “have also agreed to suspend the WTO disputes against each other related to the 232 actions.”

The-CNN-Wire
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