Thu. Jun 30th, 2022

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Secretary of Commerce Joe Biden has warned that protecting American steel is a matter of national security, and assumes Donald Trump’s predecessor as European and US officials to avoid a rise in tariffs later this year.

Trump imposed heavy duties on imports of steel and aluminum from Europe and other countries in 2018, which justifies the measure controversially on the grounds of national security.

The EU has returned with its own tariffs on a series of US imports, but plans to raise tariffs in May have dropped in a gesture aimed at resolving the dispute. The rates are applied in early December.

“We want to come to a decision,” Gina Raimondo told The Financial Times. ‘Having said that, we need to protect the American steel industry. For every year in the 10 years before the tariffs were introduced, we never got more than 80 percent capacity. It’s a national security risk, it’s an economic risk. ”

EU Trade Commissioner Valdis Dombrovskis held meetings with Raimondo and US Trade Representative Katherine Tai earlier this week, while the two parties tried to strike out an agreement.

Tai said the countries are talking ‘intensively’ to reach an agreement.

European officials insisted that the EU does not pose a threat to national security for the US, although they have acknowledged that global overcapacity threatens the European and American steel industry.

Negotiators gave themselves until early December to find a settlement, which is also intended to address the oversupply of steel emanating from production in countries including China. However, Dombrovskis said this week that the EU should reach an agreement with the US in early November so that it is time to prepare to abolish or reintroduce tariffs on US goods. EU officials say it is impossible to suspend tariffs for a second time.

The lifting of the tariffs will be politically painful for the US president, as it is popular in the politically powerful steel industry and in mill states, including Indiana, Ohio and Pennsylvania, which will be heavy during the next election.

While EU officials initially hoped to remove the tariffs without replacing them, Dombrovskis said Europe was ready to look [at] other solutions, realizing that the US is also interested in protecting its steel industry ”.

The US could also propose a form of export quota, although the EU has already ruled it out. Or he may choose to convert the tariffs into ‘security measures’ intended to deal with a sudden impact, even though it is difficult to comply with the rules of the World Trade Organization.

The discussions on the tariffs are part of a larger effort by the US and the EU to strengthen transatlantic ties after the bitterness of the Trump years.

Earlier this year, the EU and the US agreed to suspend a 17-year dispute over aviation subsidies, suspending the threat of billions of dollars in punitive tariffs on their economies in a boost to transatlantic relations.

The agreement takes the form of a five-year agreement to suspend penalty rates related to the original disagreement. Along with that is the establishment of a working group at ministerial level to discuss subsidy constraints and overcome problems that may arise between the two.

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